Question 1

Which of the following costs are NOT deductible as an itemized medical expense?

Accepted Answer

A)   The cost of insurance for long-term care services.
B)   The cost of eyeglasses.
C)   Payments to a hospital.
D)   Transportation for medical purposes.
E)   All of the choices are deductible as medical expenses.F) A) and C)
G) B) and C)

Question 2

This fall Marsha and Jeff paid $5,000 for their son Josh's tuition and fees at State University (a qualified education institution) . They also paid $1,000 for Josh's books. How much of these two payments can Marsha and Jeff deduct this year, assuming Josh is their dependent and their modified AGI is $135,000? (Assume the 2016 rules apply for purposes of the qualified education expense deduction.)

Accepted Answer

A)   Marsha and Jeff can deduct $2,000 for AGI.
B)   Marsha and Jeff can deduct $4,000 for AGI.
C)   Marsha and Jeff can deduct $2,500 for AGI.
D)   Marsha and Jeff can deduct $5,000 for AGI.
E)   None - the tuition is not deductible.F) B) and C)
G) A) and B)

Question 3

Frieda is 67 years old and deaf. If Frieda files as a head of household, what amount of standard deduction can she claim in 2017?

Accepted Answer

A)   $10,900.
B)   $1,550.
C)   $10,400.
D)   $12,700.
E)   $9,350.F) B) and C)
G) A) and E)

Question 4

Don's personal auto was damaged in a wind storm this year. Don purchased the auto several years ago for $32,000 and it was worth $18,000 at the time of the storm. The damage was superficial, so Don decided not to repair the car. Although Don collected $750 from his insurance company, the value of the car dropped after the storm to $15,000. What is the amount of casualty loss from the storm damage before Don applies any floor limitations?

Accepted Answer

$2,250
The loss is the lesser ...

Question 5

Erika (age 62) was hospitalized with injuries from an auto accident this year. She incurred the following expenses from the accident:  In addition, Erika's auto was completely destroyed in the accident. She bought the car several years ago for$18,000 and it was worth $4,700 at the time of the accident. What are Erika's itemized deductions this year if she was uninsured and her AGI is $40,000?

Accepted Answer

$1,630 consisting of $1,030 of medical e...

Question 6

All investment expenses are itemized deductions.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following is a true statement?

Accepted Answer

A)   Interest on home-equity debt up to $100,000 is deductible, even if the loan proceeds are used to buy a new car.
B)   Taxpayers may deduct interest on up to $1,000,000 of home-equity debt.
C)   Taxpayers may only deduct interest on up to $1,500,000 of acquisition indebtedness.
D)   The deduction for investment interest expense is not subject to limitation.
E)   None of the choices are true.F) C) and E)
G) C) and D)

Question 8

This year Riley files single and reports modified AGI of $71,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

Accepted Answer

A)   The deduction for qualifying education interest is $720.
B)   The deduction for qualifying education interest is $200.
C)   The deduction for qualifying education interest is $1,000.
D)   The deduction for qualifying education interest is $1,200.
E)   None of the choices are correct.F) C) and E)
G) All of the above

Question 9

Taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

Accepted Answer

A) True 
 B)False

Question 10

Han is a self-employed carpenter and his wife, Christine, works full-time as a grade school teacher. Han paid $525 for carpentry tools and supplies, and Christine paid$3,600 as her share of health insurance premiums (not with pre-tax dollars)  for Han and herself in a qualified plan provided by the school district (not through an exchange) . Which of the following is a true statement?

Accepted Answer

A)   Both expenditures are deductible for AGI.
B)   Both expenditures are itemized deductions.
C)   The tools and supplies are an itemized deduction but the health insurance is deductible for AGI.
D)   The tools and supplies are deductible for AGI while the health insurance is an itemized deduction.
E)   Neither of the expenditures is deductible.F) B) and C)
G) All of the above

Question 11

Unreimbursed employee business expenses, investment expenses, hobby expenses, and certain other expenses are classified as miscellaneous itemized deductions and aredeductible only to the extent that their sum exceeds 2% of the taxpayer's AGI.

Accepted Answer

A) True 
 B)False

Question 12

Bryan is 62 years old and lives alone. This year he has received $25,000 in taxable interest and pension payments, and he has paid the following expenses:  If Bryan files single with one personal exemption, calculate his taxable income.

Accepted Answer

$13,050 = $25,000 − $7,900 − $4,050
Brya...

Question 13

Which of the following is a true statement?

Accepted Answer

A)   A divorced taxpayer can deduct medical expenses incurred for a child even if the child is claimed as a dependent by the former spouse.
B)   A taxpayer can deduct medical expenses incurred for members of his family who are dependents.
C)   A taxpayer can deduct medical expenses incurred for a qualified relative even if the relative does not meet the gross income test.
D)   Deductible medical expenses include long-term care services for disabled spouses and dependents.
E)   All of the choices are true.F) None of the above
G) C) and E)

Question 14

Rental or royalty expenses are deductible "for" AGI.

Accepted Answer

A) True 
 B)False

Question 15

The phrase "ordinary and necessary" means that an expense must be appropriate andhelpful for generating a profit.

Accepted Answer

A) True 
 B)False

Question 16

Which of the following is a true statement?

Accepted Answer

A)   the deduction of capital gain property to private nonoperating foundations is limited to 50 percent of AGI.
B)   the deduction of cash contributions to private nonoperating foundations is limited to 30 percent of AGI.
C)   the deduction of capital gain property to public charities is limited to 20 percent of AGI.
D)   the deduction of cash contributions to public charities is limited to 30 percent of AGI.
E)   None of the choices are true.F) A) and B)
G) A) and C)

Question 17

Qualified education expenses for purposes of the deduction of interest on educational loans are expenses paid for the education of the taxpayer, the taxpayer's spouse, or a taxpayer's dependent to attend a post-secondary institution of higher education.

Accepted Answer

A) True 
 B)False

Question 18

Bruce is employed as an executive and his wife, Marie, is a self-employed realtor.Besides Bruce's salary, Bruce and Marie own a warehouse that they rent to a local business for storage. This year they paid $1,250 for electric service in the warehouse. Marie also paid self-employment tax of $6,200 and Bruce had $7,000 of Social Security taxes withheld from his pay. Marie paid $45 fee to rent a safe deposit box to storerecords associated with her realty operation. Which of the following is a true statement?

Accepted Answer

A)   The self-employment tax is not deductible.
B)   The safe deposit fee and the electric bill are deductible for AGI.
C)   One-half of the social security tax is deductible for AGI.
D)   Only the electric bill is deductible for AGI.
E)   None of the choices are true.F) C) and E)
G) B) and E)

Question 19

Taxpayers are allowed to deduct all ordinary and necessary expenses incurred in connection with determining their tax obligations imposed by federal authorities.

Accepted Answer

A) True 
 B)False

Question 20

When taxpayers donate cash and capital gain property to a public charity, the AGIpercentage limitation is applied in the following order:

Accepted Answer

A)   a 50 percent of AGI limitation is applied to the cash donation and a 20 percent of AGI limitation is applied to the fair market value of the capital gain donation.
B)   donations to public charities are not subject to AGI limitations.
C)   a 30 percent of AGI limitation is applied to the cash donation and a 20 percent of AGI limitation is applied to the fair market value of the capital gain donation.
D)   a 50 percent of AGI limitation is applied to the cash donation and the fair market value of the capital gain donation is subject to the lesser of a 30 percent of AGI limitation or a 50 percent of AGI limitation after subtracting the cash contributions.
E)   a 30 percent of AGI limitation is applied to the aggregate donation.F) A) and C)
G) A) and B)

Exam 6: Individual Deductions

Frieda is 67 years old and deaf. If Frieda files as a head of household, what amount of standard deduction can she claim in 2017?

Correct Answer
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Correct Answer
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$1,630 consisting of $1,030 of medical e...
View Answer

Which of the following costs are NOT deductible as an itemized medical expense?

Correct Answer
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Taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

Correct Answer
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Which of the following is a true statement?

Correct Answer
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This year Riley files single and reports modified AGI of $71,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

Correct Answer
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Which of the following is a true statement?

Correct Answer
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Which of the following is a true statement?

Correct Answer
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Correct Answer
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Taxpayers are allowed to deduct all ordinary and necessary expenses incurred in connection with determining their tax obligations imposed by federal authorities.

Correct Answer
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Correct Answer
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When taxpayers donate cash and capital gain property to a public charity, the AGIpercentage limitation is applied in the following order:

Correct Answer
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The phrase "ordinary and necessary" means that an expense must be appropriate andhelpful for generating a profit.

Correct Answer
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Correct Answer
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Bryan is 62 years old and lives alone. This year he has received $25,000 in taxable interest and pension payments, and he has paid the following expenses: If Bryan files single with one personal exemption, calculate his taxable income.

Correct Answer
verified
$13,050 = $25,000 − $7,900 − $4,050
Brya...
View Answer

Unreimbursed employee business expenses, investment expenses, hobby expenses, and certain other expenses are classified as miscellaneous itemized deductions and aredeductible only to the extent that their sum exceeds 2% of the taxpayer's AGI.

Correct Answer
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All investment expenses are itemized deductions.

Correct Answer
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Correct Answer
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$2,250
The loss is the lesser ...
View Answer

Qualified education expenses for purposes of the deduction of interest on educational loans are expenses paid for the education of the taxpayer, the taxpayer's spouse, or a taxpayer's dependent to attend a post-secondary institution of higher education.

Correct Answer
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Rental or royalty expenses are deductible "for" AGI.

Correct Answer
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Exam 6: Individual Deductions

Frieda is 67 years old and deaf. If Frieda files as a head of household, what amount of standard deduction can she claim in 2017?

Correct AnswerverifiedShow Answer

Correct Answerverified$1,630 consisting of $1,030 of medical e...View AnswerShow Answer

Which of the following costs are NOT deductible as an itemized medical expense?

Correct AnswerverifiedShow Answer

Taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

This year Riley files single and reports modified AGI of $71,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Taxpayers are allowed to deduct all ordinary and necessary expenses incurred in connection with determining their tax obligations imposed by federal authorities.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When taxpayers donate cash and capital gain property to a public charity, the AGIpercentage limitation is applied in the following order:

Correct AnswerverifiedShow Answer

The phrase "ordinary and necessary" means that an expense must be appropriate andhelpful for generating a profit.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Bryan is 62 years old and lives alone. This year he has received $25,000 in taxable interest and pension payments, and he has paid the following expenses: If Bryan files single with one personal exemption, calculate his taxable income.

Correct Answerverified$13,050 = $25,000 − $7,900 − $4,050Brya...View AnswerShow Answer

Unreimbursed employee business expenses, investment expenses, hobby expenses, and certain other expenses are classified as miscellaneous itemized deductions and aredeductible only to the extent that their sum exceeds 2% of the taxpayer's AGI.

Correct AnswerverifiedShow Answer

All investment expenses are itemized deductions.

Correct AnswerverifiedShow Answer

Correct Answerverified$2,250The loss is the lesser ...View AnswerShow Answer

Qualified education expenses for purposes of the deduction of interest on educational loans are expenses paid for the education of the taxpayer, the taxpayer's spouse, or a taxpayer's dependent to attend a post-secondary institution of higher education.

Correct AnswerverifiedShow Answer

Rental or royalty expenses are deductible "for" AGI.

Correct AnswerverifiedShow Answer

Correct Answer
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Correct Answer
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$1,630 consisting of $1,030 of medical e...
View Answer

Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
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Correct Answer
verified
$13,050 = $25,000 − $7,900 − $4,050
Brya...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified
$2,250
The loss is the lesser ...
View Answer

Correct Answer
verified

Correct Answer
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