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Exam 17: Individual From Agi Deductions

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Question 31

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

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

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

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Question 32

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In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

A) True
B) False

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Question 33

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Cesare is 16 years old and works throughout the year at a local coffee shop. This year, he made $9,200 at the coffee shop and earned $2,000 in interest income from his savings account. Assume that Cesare is claimed as a dependent on his parent's tax return. What is Cesare's standard deduction for the year?

This year Norma, a single taxpayer, paid $11,200 of real estate taxes on her personal residence and 9,500 of state income taxes. Which of the following is a true?

This year Latrell made the following charitable contributions: $\begin{array}{l}\begin{array}{lll}\text { Donee }\\\text { Jones Foundation}\\\text { Salvation Anmy}\\\text { City Hospital}\\\end{array}\begin{array}{l}\text { Property } \\\text { IBMI stock } \\\text { Clothes } \\\text { Cash }\end{array}\begin{array}{l}\text { Cost }&\text { FMV } \\\$ \quad 15,000&\$ 25,000 \\2,500 &500\\20,000\end{array}\end{array}$ Determine the maximum amount of Latrell's charitable deduction assuming the Jones Foundation is a private nonoperating foundation and Latrell's AGI is $100,000 this year. You may assume that the stock and painting has been owned for 10 years.

Rachel is an accountant who practices as a sole proprietor. This year, Rachel had net business income of $200,000 from her practice. Assume that Rachel pays $50,000 wages to her employees, she has $20,000 of property (unadjusted basis of equipment she purchased last year), has no capital gains, and her taxable income before the deduction for qualified business income is $140,000. Calculate Rachel's deduction for qualified business income.

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

Madeoff donated stock (capital gain property) to a public charity. He purchased the stock 3 years ago for $100,000, and on the date of the gift, it had a fair market value of $200,000. What is his maximum charitable contribution deduction for the year related to this stock if his AGI is $500,000 (before considering the itemized deduction phase-out) ?

Campbell, a single taxpayer, has $400,000 of profits from her general store that she operates as a sole proprietorship. She has $100,000 of employee wages, $40,000 of qualified property, and $500,000 of taxable income before the deduction for qualified business income. How much is Campbell's deduction for qualified business income?

Taxpayers traveling for the primary purpose of receiving essential and deductible medical care may deduct the cost of travel.

Rochelle, a single taxpayer (age 47), has an AGI of $300,000. This year, she paid medical expenses of $30,000, state income taxes of $4,000, mortgage interest of $10,600 on $250,000 acquisition debt for her home, and charitable contributions of $6,000. What would be the amount of her total itemized deductions she may claim on her tax return?

This year Amanda paid $749 in Federal gift taxes on a gratuitous transfer to her nephew. Amanda lives in Texas and does not pay any state or local income taxes. Which of the following is a true statement?

Unreimbursed employee business expenses and hobby expenses are not deductible.

Jon and Holly are married and live in a retirement community. This year Jon celebrated his 65^th birthday and Holly turned 68 years old. For their ages, both Jon and Holly are in good health. This year the only significant expense that they incurred was an unreimbursed medical expense of $3,200. If Jon and Holly together have AGI of $42,000, what is the amount of their standard deduction this year?

An individual who is eligible to be claimed as a dependent on another's return and has $1,000 of earned income may claim a standard deduction of $1,350.

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 auto. Although Don collected $750 from his insurance company, the value of the auto dropped after the storm to $15,000. What is Don's tax deduction related to the damage?

Frieda is 67 years old and deaf. If Frieda files as a head of household, what amount of standard deduction can she claim in 2018? Standard deduction

Glenn is an accountant who races stock cars as a hobby. This year Glenn was paid a salary of $80,000 from his employer and won $2,000 in various races. What is the effect of the racing activities on Glenn's taxable income if Glenn has also incurred $4,200 of hobby expenses this year? Assume that Glenn itemizes his deductions but has no other miscellaneous itemized deductions.

Generally, service businesses are considered qualified trade or businesses for purposes of the deduction for qualified business income.

Which of the following is a true statement?