Question 1

Peter is a plumber employed by a major contracting firm.During 2013,he paid the following miscellaneous expenses: Unreimbursed employee business expenses $\quad\$ 410$
Union dues $\quad\$ 600$
Tax return preparation fee $\quad\$ 100$
Safe deposit box rental fee (used only forpersonal effects) $\quad\$ 20$ If Peter were to itemize his deductions for 2013,what amount could he claim as miscellaneous itemized deductions before applying the 2 percent of adjusted gross income limitation)?

Accepted Answer

A) $700 
B) $1,010 
C) $1,110 
D) $1,130 
E) None of the above

Question 2

Rob's employer has an accountable plan for employee expenses.His employer reimburses him for
$1,000 of professional dues and subscriptions.
a.How much of the reimbursement must Rob include in income?
b.How much can Rob claim as a miscellaneous itemized deduction subject to the 2 percent floor?

Accepted Answer

The answer of Rob's employer has an accountable plan for...

Question 3

Which one of the following is not tax deductible?

Accepted Answer

A) Real estate taxes 
B) Property taxes 
C) Local income taxes 
D) State income taxes 
E) All of the above are tax deductible

Question 4

In 2013,Geoffrey receives $20,000 from a qualified tuition program created by his grandmother.The program had accumulated $6,000 in earnings.He used the full $20,000 to pay for qualified higher education expenses.Calculate the amount of earnings subject to taxation.

Accepted Answer

The answer of In 2013,Geoffrey receives $20,000 from a qualified...

Question 5

All personal casualty losses incurred during the year are added together and only one $100 floor amount is used to reduce the casualty deduction.

Accepted Answer

A) True 
 B)False

Question 6

Catherine is a CPA employed by a large accounting firm in San Francisco.In 2013,she paid the following amounts: CPA Society dues $\quad\$ 200$
One year tax service $\quad \$ 700$
"Wiley Accountant" magazine $\quad\$ 70$
"Modern Sailing" magazine $\quad\$ 75$ How much may she deduct on Schedule A as a miscellaneous deduction,before considering the 2 percent of adjusted gross income limitation?

Accepted Answer

A) $270 
B) $345 
C) $970 
D) $1,045 
E) None of the above

Question 7

A taxpayer may donate the free use of property to a charitable organization and deduct the value as an itemized deduction.

Accepted Answer

A) True 
 B)False

Question 8

Lourdes is a paralegal.Since she often deals with legal matters,she feels a law degree would be beneficial to her.May Lourdes deduct her educational expenses for law school as a miscellaneous itemized deduction? Explain.

Accepted Answer

The answer of Lourdes is a paralegal.Since she often deals...

Question 9

Weber resides in a state that imposes a tax on income.The following information relating to Weber's state income taxes is available: State income taxes withheld in $2013 \quad \$ 3,000$
Refund received in 2013 of 2012 tax $\quad \$ 300$
Assessment paid in 2013 of 2011 tax $\quad \$ 800$ Assuming he elects to deduct state and local income taxes,what amount should Weber use as state and local income taxes in calculating itemized deductions for his 2013 Federal income tax return?

Accepted Answer

A) $2,700 
B) $3,000 
C) $3,500 
D) $3,800 
E) None of the above

Question 10

Phillip,a single parent,would like to contribute $1,800 to an educational savings account for his 10-year- old son.His AGI is $100,000.Calculate the amount of the contribution he can make.

Accepted Answer

The answer of Phillip,a single parent,would like to contribute $1,800...

Question 11

Kat has a small bungalow which burns up in a fire.Kat is not insured for fire.The bungalow originally cost $20,000,but was worth $45,000 before the fire.Kat has $30,000 of adjusted gross income.How much can Kat claim as a casualty loss in her tax return? Explain.

Accepted Answer

The answer of Kat has a small bungalow which burns...

Question 12

Ronald donates publicly traded Microsystems stock with a basis of $2,000 and a fair market value of
$20,000 to the local library,which is considered a public charity.Ronald has $30,000 of adjusted gross income,and he purchased the stock 15 years ago.How is this contribution treated on Ronald's tax return?

Accepted Answer

The answer of Ronald donates publicly traded Microsystems stock with...

Question 13

In 2013,state income taxes may be deducted as an itemized deduction on Schedule A.

Accepted Answer

A) True 
 B)False

Question 14

Carla is a high school teacher who is required by her school district to take continuing education courses which are offered at the local college.She is also in the process of taking classes at a different university where she is pursuing her Ph.D.to become a research specialist.She pays the tuition for both schools.Which of the following is true?

Accepted Answer

A) She may deduct all of the tuition from each school because they are education expenses related to job skill improvement. 
B) She may not deduct tuition from either school. 
C) She may not deduct the continuing education tuition because it is required by her job. 
D) She may deduct the continuing education tuition from the local college because it meets her employer's requirement to maintain her current job skills. 
E) None of the above is correct.

Question 15

The adjusted gross income AGI)limitation on medical expenses is 15 percent.

Accepted Answer

A) True 
 B)False

Question 16

For married taxpayers filing a joint return in 2013,at what AGI level does the phase-out limit for contributions to Qualified Tuition Programs Section 529 plans)start?

Accepted Answer

A) $150,500 
B) $188,150 
C) $225,750 
D) There is no phase-out limit on Qualified Tuition Program contributions

Question 17

For the year ended December 31,2013,David,a married taxpayer filing a joint return,reported the following: In vestment income from interest $\quad \$ 24,000$
In vestment expenses other than interest $\quad\$ 4,000$
Interest expense on funds borrowed in 2005 to purchaseinvestment property $\quad\$ 70,000$ What is the maximum amount that David can deduct in 2013 as investment interest expense?

Accepted Answer

A) $7,000 
B) $20,000 
C) $21,000 
D) $24,000 
E) None of the above

Question 18

Roberto,age 50,has AGI of $110,000 for 2013.He has medical expenses of $12,000.How much of the medical expenses can Roberto deduct on his Schedule A for 2013?

Accepted Answer

A) $12,000 
B) $0 
C) $1,000 
D) $8,250 
E) None of the above is correct

Question 19

Which of the following is not considered a deductible medical expense?

Accepted Answer

A) A face lift 
B) Eye exams 
C) Prescription drugs 
D) Medical insurance

Question 20

Which of the following is not an itemized deduction?

Accepted Answer

A) Medical expenses 
B) IRA contribution deduction 
C) Personal property taxes 
D) Union dues 
E) All of the above are itemized deductions

Exam 5: Itemized Deductions and Other Incentives

Rob's employer has an accountable plan for employee expenses.His employer reimburses him for $1,000 of professional dues and subscriptions. a.How much of the reimbursement must Rob include in income? b.How much can Rob claim as a miscellaneous itemized deduction subject to the 2 percent floor?

Which one of the following is not tax deductible?

In 2013,Geoffrey receives $20,000 from a qualified tuition program created by his grandmother.The program had accumulated $6,000 in earnings.He used the full $20,000 to pay for qualified higher education expenses.Calculate the amount of earnings subject to taxation.

All personal casualty losses incurred during the year are added together and only one $100 floor amount is used to reduce the casualty deduction.

A taxpayer may donate the free use of property to a charitable organization and deduct the value as an itemized deduction.

Lourdes is a paralegal.Since she often deals with legal matters,she feels a law degree would be beneficial to her.May Lourdes deduct her educational expenses for law school as a miscellaneous itemized deduction? Explain.

Phillip,a single parent,would like to contribute $1,800 to an educational savings account for his 10-year- old son.His AGI is $100,000.Calculate the amount of the contribution he can make.

Kat has a small bungalow which burns up in a fire.Kat is not insured for fire.The bungalow originally cost $20,000,but was worth $45,000 before the fire.Kat has $30,000 of adjusted gross income.How much can Kat claim as a casualty loss in her tax return? Explain.

In 2013,state income taxes may be deducted as an itemized deduction on Schedule A.

The adjusted gross income AGI)limitation on medical expenses is 15 percent.

For married taxpayers filing a joint return in 2013,at what AGI level does the phase-out limit for contributions to Qualified Tuition Programs Section 529 plans) start?

Roberto,age 50,has AGI of $110,000 for 2013.He has medical expenses of $12,000.How much of the medical expenses can Roberto deduct on his Schedule A for 2013?

Which of the following is not considered a deductible medical expense?

Which of the following is not an itemized deduction?