FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 10: Deductions and Losses: Certain Itemized Deductions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Essay

Review LaterAdd Note

Review Later

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 amount of real estate taxes can Mike deduct? a.What is Mike's basis in the residence? b.What amount of real estate taxes can Shirley deduct? b.What is Shirley's amount realized from the sale of the residence?

Correct Answer

verified

General discussion.For Federal income ta...

View Answer

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Pedro's child attends a school operated by the church the family attends.Pedro made a donation of $1,000 to the church in lieu of the normal registration fee of $200.In addition,Pedro paid the regular tuition of $6,000 to the school.Based on this information,what is Pedro's charitable contribution?

A) $0
B) $800
C) $1,000
D) $6,800
E) $7,000

F) A) and D)
G) A) and C)

Correct Answer

verified

Show Answer

Question 43

True/False

Review LaterAdd Note

In 2014,Dena traveled 600 miles for specialized medical treatment that was not available in her hometown.She paid $90 for meals during the trip,$145 for a hotel room on Tuesday night,and $15 in parking fees.She did not keep records of other out-of-pocket costs for transportation.Dena can include $206 in computing her medical expenses.

Ross,who is single,purchased a personal residence eight years ago for $170,000 and took out a mortgage of $100,000 on the property.In May of the current year,when the residence had a fair market value of $220,000 and Ross owed $70,000 on the mortgage,he took out a home equity loan for $110,000.He used the funds to purchase a BMW for himself and a Lexus SUV for his wife.For both vehicles,100% of the use is for personal activities.What is the maximum amount on which Ross can deduct home equity interest?

Paul and Patty Black (both are age 66)are married and together have AGI of $140,000 in 2014.They have two dependents and file a joint return.During the year,they paid $8,000 for medical insurance,$15,000 in doctor bills and hospital expenses,and $1,000 for prescribed medicine and drugs. a.In December 2014,the Blacks received an insurance reimbursement of $3,500 for hospitalization expenses.Determine the deduction allowable for medical expenses paid during the year. b.Assume instead that the Blacks received the $3,500 insurance reimbursement in February 2015.Determine the deduction allowable for medical expenses incurred in 2014. c.Assume that the Blacks received the $3,500 insurance reimbursement in February 2015.Discuss whether the reimbursement will be included in their gross income for 2015.

Georgia contributed $2,000 to a qualifying Health Savings Account in 2014.The entire amount qualifies as an expense deductible for AGI.

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?

Your friend Scotty informs you that he received a "tax­free" reimbursement in 2014 of some medical expenses he paid in 2013.Which of the following statements best explains why Scotty is not required to report the reimbursement in gross income?

Phyllis,a calendar year cash basis taxpayer who itemized deductions,overpaid her 2013 state income tax and is entitled to a refund of $400.Phyllis chooses to apply the $400 overpayment toward her state income taxes for 2014.She is required to recognize that amount as income in 2014.

Gambling losses may be deducted to the extent of the taxpayer's gambling winnings.Such losses are subject to the 2% floor for miscellaneous itemized deductions.

Points paid by the owner of a personal residence to refinance an existing mortgage must be capitalized and amortized over the life of the new mortgage.

Linda,who has AGI of $120,000 in the current year,contributes stock in Mauve Corporation (a publicly traded corporation)to the Salvation Army,a qualified charitable organization.The stock is worth $65,000,and Linda acquired it as an investment four years ago at a cost of $50,000. a.What is the total amount that Linda can deduct as a charitable contribution,assuming she carries over any disallowed contribution from the current year to future years? b.What is the maximum amount that Linda can deduct as a charitable contribution in the current year? c.What factors should Linda consider in deciding how to treat the contribution for Federal income tax purposes? d.Assume Linda dies in December of this year.What advice would you give the executor of her estate with regard to possible elections that can be made relative to the contribution?

Paul,a calendar year married taxpayer,files a joint return for 2014.Information for 2014 includes the following:

Chad pays the medical expenses of his son,James.James would qualify as Chad's dependent except that he earns $7,500 during the year.Chad may claim James' medical expenses even if he is not a dependent.

In the year of her death,Maria made significant charitable contributions of capital gain property.In fact,the amount of the contributions exceeds 30% of her AGI.Maria's executor can elect to deduct charitable contributions of up to 50% of Maria's AGI on Maria's final income tax return.

Brad,who uses the cash method of accounting,lives in a state that imposes an income tax (including withholding from wages) .On April 14,2014,he files his state return for 2013,paying an additional $600 in state income taxes.During 2014,his withholdings for state income tax purposes amount to $3,550.On April 13,2015,he files his state return for 2014 claiming a refund of $800.Brad receives the refund on June 3,2015.If he itemizes deductions,how much may Brad claim as a deduction for state income taxes on his Federal income tax return for calendar year 2014 (filed in April 2015) ?

Tom,whose MAGI is $40,000,paid $3,500 of interest on a qualified student loan in 2014.Tom is single.He may deduct the $3,500 interest as an itemized deduction.

For purposes of computing the deduction for qualified residence interest,a qualified residence includes the taxpayer's principal residence and two other residences of the taxpayer or spouse.

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.

John gave $1,000 to a family whose house was destroyed by fire.John may claim a charitable deduction of $1,000 on his tax return for the current year.