FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 10: Deduction and Losses Certain Itemized Deductions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 1

Multiple Choice

Review LaterAdd Note

Review Later

Emily,who lives in Indiana,volunteered to travel to Louisiana in March to work on a home-building project for Habitat for Humanity (a qualified charitable organization) .She was in Louisiana for three weeks.She normally makes $500 per week as a carpenter's assistant and plans to deduct $1,500 as a charitable contribution.In addition,she incurred the following costs in connection with the trip: $600 for transportation,$1,200 for lodging,and $400 for meals.What is Emily's deduction associated with this charitable activity?

A) $600
B) $1,200
C) $1,800
D) $2,200
E) $3,700

F) D) and E)
G) B) and C)

Correct Answer

verified

Show Answer

Question 2

Multiple Choice

Review LaterAdd Note

Review Later

Sandra is single and does a lot of business entertaining at home.Because Arthur,Sandra's 80-year old dependent grandfather who lived with Sandra,needs medical and nursing care,he moved to Twilight Nursing Home.During the year,Sandra made the following payments on behalf of Arthur: Room at Twilight $4,500 Meals for Arthur at Twilight 850 Doctor and nurse fees 700 Cable TV service for Arthur's room 107 Total $6,157 ​ Twilight has medical staff in residence.Disregarding the AGI floor,how much,if any,of these expenses qualify for a medical deduction by Sandra?

A) $6,157
B) $6,050
C) $5,200
D) $1,550
E) None of the above

F) C) and D)
G) B) and D)

Correct Answer

verified

Show Answer

Question 3

True/False

Review LaterAdd Note

A physician recommends a private school for Ellen's dependent child.Because of the physician's recommendation,the cost of the private school will qualify as a medical expense deduction (subject to percentage limitations).

Sergio was required by the city to pay $2,000 for the cost of new curbing installed by the city in front of his personal residence.The new curbing was installed throughout Sergio's neighborhood as part of a street upgrade project.Sergio may not deduct $2,000 as a tax,but he may add the $2,000 to the basis of his property.

In 2016,Boris pays a $3,800 premium for high-deductible medical insurance for himself and his family.In addition,he contributes $3,400 to a Health Savings Account.Which of the following statements is true?

Pat gave 5,000 shares of stock in Coyote Corporation (a publicly traded corporation) to her church (a qualified charitable organization) in the current year.The stock was worth $180,000 and she had acquired it as an investment four years ago at a cost of $120,000.She reported AGI of $300,000 for the year.In completing her current income tax return,how much is her current-year charitable contribution deduction?

In Lawrence County,the real property tax year is the calendar year.The real property tax becomes a personal liability of the owner of real property on January 1 in the current real property tax year (assume this year is not a leap year) .The tax is payable on June 1.On May 1,Reggie sells his house to Dana for $350,000.On June 1,Dana pays the entire real estate tax of $7,950 for the year ending December 31.How much of the property taxes may Reggie deduct?

Grace's sole source of income is from a restaurant that she owns and operates as a proprietorship.Any state income tax Grace pays on the business net income must be deducted as a business expense rather than as an itemized deduction.

For calendar year 2016,Jon and Betty Hansen (ages 59 and 60)file a joint return reflecting AGI of $280,000.They incur the following expenditures: Medical expenses before 10%-of-AGI floor $30,000 Casualty loss (not covered by insurance)before statutory floors 30,000 Interest on home mortgage 10,000 Interest on credit cards 800 Property taxes on home 13,000 Charitable contributions 17,000 State income tax 15,000 Tax return preparation fees 1,200 What is the amount of itemized deductions the Hansens may claim?

During 2016,Kathy,who is self-employed,paid $650 per month for an HSA contract that provides medical insurance coverage with a $3,000 deductible.The plan covers Kathy,her husband,and their three children.Of the $650 monthly fee,$300 was for the high-deductible policy,and $350 was deposited into an HSA.How much of the amount paid for the high-deductible policy can Kathy deduct as a deduction for AGI?

For purposes of computing the deduction for qualified residence interest,a qualified residence includes only the taxpayer's principal residence.

Shirley sold her personal residence to Mike for $400,000.Before the sale,Shirley paid the real estate taxes of $7,030 for the calendar year.For income tax purposes,the deduction is apportioned as follows: $4,000 to Shirley and $3,030 to Mike. a.What is Mike's basis in the residence? b.What is Shirley's amount realized from the sale of the residence? c.What amount of real estate taxes can Mike deduct? d.What amount of real estate taxes can Shirley deduct?

Richard,age 50,is employed as an actuary.For calendar year 2016,he had AGI of $130,000 and paid the following medical expenses: Medical insurance premiums $5,300 Doctor and dentist bills for Derrick and Jane (Richard's parents) 7,900 Doctor and dentist bills for Richard 5,100 Prescribed medicines for Richard 830 Nonprescribed insulin for Richard 960 Derrick and Jane would qualify as Richard's dependents except that they file a joint return.Richard's medical insurance policy does not cover them.Richard filed a claim for $4,800 of his own expenses with his insurance company in November 2016 and received the reimbursement in January 2017.What is Richard's maximum allowable medical expense deduction for 2016?

George is single and age 56,has AGI of $265,000,and incurs the following expenditures in 2016. Medical expenses (before 10%-of-AGI floor) $27,000 Interest on home mortgage 15,500 State income tax 7,500 State sales tax 4,500 Real estate tax 8,600 Charitable contribution 6,500 What is the amount of itemized deductions George may claim?

Edna had an accident while competing in a rodeo.She sustained facial injuries that required cosmetic surgery.While having the surgery done to restore her appearance,she had additional surgery done to reshape her chin,which was not injured in the accident.The surgery to restore her appearance cost $9,000 and the surgery to reshape her chin cost $6,000.How much of Edna's surgical fees will qualify as a deductible medical expense (before application of the 10%-of-AGI floor) ?

During 2016,Hugh,a self-employed individual,paid the following amounts: Real estate tax on Iowa residence $3,800 State income tax 1,700 Real estate taxes on land in Puerto Rico (held as an investment) 1,100 Gift tax paid on gift to daughter 1,200 State sales taxes 1,750 State occupational license fee 300 Property tax on value of his automobile (used 100% for business) 475 ​ What is the maximum amount Hugh can claim as taxes in itemizing deductions from AGI?

Jack sold a personal residence to Steven and paid points of $3,500 on the loan to help Steven finance the purchase.Jack can deduct the points as interest.

On December 31,2016,Lynette used her credit card to make a $500 contribution to the United Way,a qualified charitable organization.She will pay her credit card balance in January 2017.If Lynette itemizes,she can deduct the $500 in 2016.

Fees for automobile inspections,automobile titles and registration,bridge and highway tolls,parking meter deposits,and postage are not deductible if incurred for personal reasons,but they are deductible as deductions for AGI if incurred as a business expense by a self-employed taxpayer.

Charitable contributions that exceed the percentage limitations for the current year can be carried over for up to three years.