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Exam 6: Individual Deductions

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Question 51

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Erika (age 62)was hospitalized with injuries from an auto accident this year.She incurred the following expenses from the accident: Hospital charges              53,280 Prescription medicine          510 Doctor's fees                        1,240 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?

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

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Question 52

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Which of the following is a true statement?

A) Unreimbursed employee business expenses are deductible as miscellaneous itemized deductions.
B) With one exception, investment expenses are deductible as itemized deductions.
C) Business deductions are one of the most common deductions for AGI but they are not readily visible on the front of Form 1040.
D) The distinction between business and investment expenses is critical for determining whether a deduction is claimed above the line (for AGI) or below the line (itemized) .
E) All of the choices are true.

F) A) and E)
G) B) and E)

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Question 53

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Which of the following itemized deductions is not subject to the itemized deduction phase-out?

In 2017,personal and dependency exemptions are $6,350 for single taxpayers.

To qualify as a charitable deduction the donation must be made by cash or by check.

Which of the following is a true statement?

Mason paid $4,100 of interest on a loan that paid tuition for him to attend a private university this year.How much of this payment can Mason deduct as interest expense on an educational loan if he files single and reports modified AGI of $90,000?

This fall Manfred enrolled in the law school at State University (a qualified educational institution) and paid $6,200 in tuition.Until his enrollment Manfred worked as a stock broker and this year he reports $70,000 in wages.If Manfred files single and reports no other items of income or expense how much of the tuition can he deduct as a business expense?

The definition of qualifying expenses is more restrictive for the qualified educational expense deduction than it is for the education loan interest expense deduction.

Colby is employed full time as a food technician for a local restaurant chain.This year he has incurred the following expenses associated with his employment: Trarsportation betweer yarious restalurarts                        $\$ 280$ Techiciar uiforrs (not adaptable to daily wear)                      310 $\text { Professional dues and license }$                                 1,200 Colby was reimbursed $125 of the expenses from his employer's accountable plan.What amount can he include with his remaining itemized deductions if his AGI this year is $32,000?

Constance currently commutes 25 miles from her house to her existing part time job in the suburbs.Next week she begins a new full time job in another state,and this job location is 100 miles from her existing home.Because of the additional distance Constance is selling her house,and she has rented an apartment that is only 2 miles from her new job.Constance expects to pay the following moving expenses. Cost of searchirg for arl apartrient                                        $\$ 325$ Trarnsportation - auto (computed using the mileage rate of 17 cents per mile, rounded)                                                                                                                              $17$ Cost of van to move furriture and possessions                       $815$ Meals while en route                                                                 $25$ Determine if this move qualifies for a moving expense deduction and calculate the amount (if any)of the deduction.

Margaret Lindley paid $15,000 of interest on her $300,000 acquisition debt for her home (fair market value of $500,000) ,$4,000 of interest on her $30,000 home-equity loan,$1,000 of credit card interest,and $3,000 of margin interest for the purchase of stock.Assume that Margaret Lindley has $10,000 of interest income this year and no investment expenses.How much of the interest expense may she deduct this year?

This year Tiffanie files as a single taxpayer.Tiffanie received $62,700 of salary and paid $3,200 of qualified educational interest.This year Tiffanie has also paid deductible moving expenses of $2,200 and received $12,000 of alimony.What is Tiffanie's AGI?

Taxpayers are allowed to deduct mortgage interest on up to $1,000,000 of acquisition debt for their qualified residence and on up to $500,000 of home-equity debt.

Which of the following expenses can be deducted as moving expenses? 1.The cost of a trip to purchase a new residence 2) The cost of moving personal belongings 3) Lodging (one night) while en route 4) The cost of gasoline when traveling to the new residence 5) One-half of the cost of meals while en route to the new residence

All investment expenses are itemized deductions.

Clark is a registered nurse and full time employee of the Hays Hospital.To maintain his nursing license Clark has incurred the following expenses: Nursirg urifants                                   $1,650 Uriical dues                                             400 Professional dues and license                  800 Contiruing education courses                   450 Clark was reimbursed $1,250 of his expenses from his Hays Hospital accountable reimbursement plan.What amount can he include with his remaining itemized deductions if his AGI this year is $52,000?

Toshiomi works as a sales representative and travels extensively for his employer's business.This year Toshiomi was paid $75,000 in salary and made the following expenditures: State ircorre taxes withineld                                      $\$ 6,300$ Employee business expenses (urreimbursed portion)                      1,450 Charitable contributions                                                  200 Irvestrnent counseling fees                                              780 Tax preparation fee                                                          310 Toshiomi also made a number of trips to Las Vegas for gambling.This year Toshiomi won $12,000 in a poker tournament and this amount was almost enough to offset his other gambling losses ($13,420).Calculate Toshiomi's taxable income if he files single with one personal exemption.

Which of the following is a true statement?

Which of the following is a true statement?