Question 1

The amount of a special assessment charged to residents for the installation of sidewalks on their street is not deductible on Schedule A as property taxes.

Accepted Answer

A) True 
 B)False

Question 2

Which of the following employees may deduct the cost of a uniform? ​

Accepted Answer

A) A stock broker required by her employer to wear a business suit 
B) A construction worker required by her employer to wear blue jeans 
C) A member of the clergy that must wear ornate robes for special ceremonies 
D) A police detective who must wear a suit and tie while on duty 
E) A delivery person who must wear khaki-colored clothes on the job

Question 3

For 2017,Betsy and Bob,ages 62 and 68,respectively,are married taxpayers who file a joint tax return with AGI of $50,000.During the year they incurred the following expenses:
In addition,their insurance company reimbursed them $3,100 for the above expenses.
  ​
Using the format below,calculate Betsy and Bob's deduction for medical and dental expenses for 2017.
​
  ​

Accepted Answer

The answer of For 2017,Betsy and Bob,ages 62 and 68,respectively,are...

Question 4

Jennie receives $12,000 (of which $2,000 is earnings)from a Qualified Tuition Program.She uses the funds to pay for new furniture for her apartment.What amount is taxable to Jennie?

Accepted Answer

A) $12,000 
B) $10,000 
C) $3,000 
D) $2,000 
E) ​$0

Question 5

Meade paid $5,000 of state income taxes in 2017.The total actual sales taxes paid during 2017 was $4,500,which did not include $3,000 for the sales taxes paid in 2017 on Meade's new boat.How should Meade treat the taxes paid in his 2017 tax return?

Accepted Answer

The answer of Meade paid $5,000 of state income taxes...

Question 6

Kat owns a small bungalow which is destroyed in a fire.Kat is not insured for fire.The bungalow originally cost $22,000,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 owns a small bungalow which is...

Question 7

​Foreign income taxes paid are deductible.

Accepted Answer

A) True 
 B)False

Question 8

Randy is advised by his physician to install an elevator in his residence,since he is afflicted with heart disease.The cost of installing the elevator is $10,000 and it has an estimated useful life of 10 years.He installs the elevator in January of the current year,and it increases the value of his residence by $8,000.Disregarding the limitation based on adjusted gross income,how much of the cost of the elevator may Randy take into account in determining his medical expense deduction for the current year?

Accepted Answer

A) $0 
B) $750 
C) $2,000 
D) $10,000 
E) None of the above

Question 9

Richie Rominey purchases a new $4.3 million qualified principal residence in Palo Alto,California using a mortgage loan of $3 million.Richie's mortgage interest deduction may be limited.

Accepted Answer

A) True 
 B)False

Question 10

Amy paid the following interest expense during the current year: What is the amount of Amy's interest deduction for the current year?

Accepted Answer

A) $1,000 
B) $3,000 
C) $4,000 
D) $5,000 
E) $6,000

Question 11

Shellie,a single individual,received her Bachelor's degree in 2016,and took a job with a salary of $45,000 per year.In 2017,she began paying interest on qualified education loans.She was able to pay $1,500 in 2017.Which of the following statements is correct?

Accepted Answer

A) The full $1,500 is deductible in arriving at adjusted gross income (AGI). 
B) If her payment had been $3,000,only $2,000 would have been deductible in arriving at AGI and the $1,000 excess would have been treated as nondeductible consumer interest. 
C) If her income had been $60,000,the deductible amount would have been phased out. 
D) Taxpayers are not allowed a deduction for education loan interest in 2017.

Question 12

Alicia is a single taxpayer with AGI of $338,400 and itemized deductions of $100,000 which are made up of $30,000 of mortgage interest,$30,000 of state income taxes and property taxes,and $40,000 of contributions to her temple.What is the amount of itemized deductions that Alicia may deduct on her 2017 income tax return after the phase-out for high-income taxpayers?

Accepted Answer

A) $100,000 
B) $0 
C) $70,000 
D) $97,630 
E) $97,693

Question 13

Which of the following is deductible as a miscellaneous itemized deduction?

Accepted Answer

A) Union dues 
B) Professional dues and subscriptions 
C) Job hunting expenses 
D) Investment expenses 
E) All of the above are miscellaneous deductions

Question 14

Margo has $2,200 withheld from her wages for state income taxes during 2017.In March of 2017,she paid $400 in additional taxes for her 2016 state tax return.Her state income tax liability for 2017 is $2,700 and she pays the additional $500 when she files her 2017 state tax return in April of 2018.What amount should Margo deduct as an itemized deduction for state income taxes on her 2017 federal income tax return,assuming she deducts state and local income taxes?

Accepted Answer

A) $2,100 
B) $2,500 
C) $2,600 
D) $3,100 
E) None of the above

Question 15

Peter is a plumber employed by a major contracting firm.During the current year,he paid the following miscellaneous expenses: If Peter were to itemize his deductions for the current year,what amount could he claim as miscellaneous itemized deductions (before applying the 2 percent of adjusted gross income limitation)?

Accepted Answer

A) $100 
B) $550 
C) $1,070 
D) $1,150 
E) None of the above

Question 16

Jean's employer has an accountable plan for reimbursing employee expenses.Jean is reimbursed for $1,500 of business travel and $500 for various business subscriptions and professional dues.The $2,000 reimbursement should be treated as follows: ​

Accepted Answer

A) $2,000 of income to Jean should be reported 
B) Income to Jean and a corresponding miscellaneous deduction for Jean,subject to the 2 percent of AGI floor 
C) ​$500 of income should be reported to Jean 
D) No taxable income should be reported to Jean

Question 17

Pat has a dependent daughter and files as head of household.She has AGI of $376,000.What percentage of the $4,050 personal exemption and $4,050 dependency exemption may she deduct on her 2017 income tax return?

Accepted Answer

A) 0 percent 
B) 74 percent 
C) 28 percent 
D) 30 percent 
E) 100 percent

Question 18

Which of the following is true with respect to an education incentive?

Accepted Answer

A) Contributions to Qualified Tuition Programs (Section 529 plans)are deductible. 
B) Contributions to education savings accounts (Coverdell ESAs)are deductible. 
C) Tuition paid by a taxpayer earning $300,000 of income is deductible. 
D) Married taxpayers at any income level may contribute to a Qualified Tuition Program (Section 529 plan).

Question 19

During the current year,George,a salaried taxpayer,paid the following taxes which were not incurred in connection with a trade or business: What amount can George claim for the current year as an itemized deduction for the taxes paid,assuming he deducts state and local income taxes?

Accepted Answer

A) $1,100 
B) $1,150 
C) $1,400 
D) $2,000 
E) None of the above

Question 20

​Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work.Brittany's gas excise taxes are deductible as an itemized deduction.

Accepted Answer

A) True 
 B)False

Exam 5: Itemized Deductions and Other Incentives

The amount of a special assessment charged to residents for the installation of sidewalks on their street is not deductible on Schedule A as property taxes.

Which of the following employees may deduct the cost of a uniform?

Jennie receives $12,000 (of which $2,000 is earnings) from a Qualified Tuition Program.She uses the funds to pay for new furniture for her apartment.What amount is taxable to Jennie?

Meade paid $5,000 of state income taxes in 2017.The total actual sales taxes paid during 2017 was $4,500,which did not include $3,000 for the sales taxes paid in 2017 on Meade's new boat.How should Meade treat the taxes paid in his 2017 tax return?

Kat owns a small bungalow which is destroyed in a fire.Kat is not insured for fire.The bungalow originally cost $22,000,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.

Foreign income taxes paid are deductible.

Richie Rominey purchases a new $4.3 million qualified principal residence in Palo Alto,California using a mortgage loan of $3 million.Richie's mortgage interest deduction may be limited.

Amy paid the following interest expense during the current year: What is the amount of Amy's interest deduction for the current year?

Shellie,a single individual,received her Bachelor's degree in 2016,and took a job with a salary of $45,000 per year.In 2017,she began paying interest on qualified education loans.She was able to pay $1,500 in 2017.Which of the following statements is correct?

Which of the following is deductible as a miscellaneous itemized deduction?

Jean's employer has an accountable plan for reimbursing employee expenses.Jean is reimbursed for $1,500 of business travel and $500 for various business subscriptions and professional dues.The $2,000 reimbursement should be treated as follows:

Pat has a dependent daughter and files as head of household.She has AGI of $376,000.What percentage of the $4,050 personal exemption and $4,050 dependency exemption may she deduct on her 2017 income tax return?

Which of the following is true with respect to an education incentive?

During the current year,George,a salaried taxpayer,paid the following taxes which were not incurred in connection with a trade or business: What amount can George claim for the current year as an itemized deduction for the taxes paid,assuming he deducts state and local income taxes?

Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work.Brittany's gas excise taxes are deductible as an itemized deduction.

Exam 5: Itemized Deductions and Other Incentives

The amount of a special assessment charged to residents for the installation of sidewalks on their street is not deductible on Schedule A as property taxes.

Which of the following employees may deduct the cost of a uniform? ​

Jennie receives $12,000 (of which $2,000 is earnings) from a Qualified Tuition Program.She uses the funds to pay for new furniture for her apartment.What amount is taxable to Jennie?

Meade paid $5,000 of state income taxes in 2017.The total actual sales taxes paid during 2017 was $4,500,which did not include $3,000 for the sales taxes paid in 2017 on Meade's new boat.How should Meade treat the taxes paid in his 2017 tax return?

Kat owns a small bungalow which is destroyed in a fire.Kat is not insured for fire.The bungalow originally cost $22,000,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.

​Foreign income taxes paid are deductible.

Richie Rominey purchases a new $4.3 million qualified principal residence in Palo Alto,California using a mortgage loan of $3 million.Richie's mortgage interest deduction may be limited.

Amy paid the following interest expense during the current year: What is the amount of Amy's interest deduction for the current year?

Shellie,a single individual,received her Bachelor's degree in 2016,and took a job with a salary of $45,000 per year.In 2017,she began paying interest on qualified education loans.She was able to pay $1,500 in 2017.Which of the following statements is correct?

Which of the following is deductible as a miscellaneous itemized deduction?

Jean's employer has an accountable plan for reimbursing employee expenses.Jean is reimbursed for $1,500 of business travel and $500 for various business subscriptions and professional dues.The $2,000 reimbursement should be treated as follows: ​

Pat has a dependent daughter and files as head of household.She has AGI of $376,000.What percentage of the $4,050 personal exemption and $4,050 dependency exemption may she deduct on her 2017 income tax return?

Which of the following is true with respect to an education incentive?

During the current year,George,a salaried taxpayer,paid the following taxes which were not incurred in connection with a trade or business: What amount can George claim for the current year as an itemized deduction for the taxes paid,assuming he deducts state and local income taxes?

​Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work.Brittany's gas excise taxes are deductible as an itemized deduction.

Which of the following employees may deduct the cost of a uniform?

Foreign income taxes paid are deductible.

Jean's employer has an accountable plan for reimbursing employee expenses.Jean is reimbursed for $1,500 of business travel and $500 for various business subscriptions and professional dues.The $2,000 reimbursement should be treated as follows:

Brittany determined that she paid $450 in gasoline excise taxes during the year when she bought gas for her commute to and from work.Brittany's gas excise taxes are deductible as an itemized deduction.