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 51

True/False

Review LaterAdd Note

Review Later

Maria traveled to Rochester, MN with her son who had surgery at the Mayo Clinic.He stayed at the clinic for the duration of his treatment.She paid airfare of $300 and $50 per night for lodging.The cost of Maria's airfare and lodging cannot be included in determining her medical expense deduction.

A) True
B) False

Correct Answer

verified

Show Answer

Question 52

Multiple Choice

Review LaterAdd Note

Review Later

Brad, who would otherwise qualify as Faye's dependent, had gross income of $9,000 during the year.Faye, who had AGI of $120,000, paid the following medical expenses this year: $\begin{array} { l r } \text { Cataract operation for Brad } & \$ 5,400 \\\text { Brad's prescribed contact lenses } & 1,800 \\\text { Faye's doctor and dentist bills } & 12,600 \\\text { Prescribed drugs for Faye } & \underline { 2,550 } \\\text { Total } & \underline { \underline { \$ 22,350 } }\end{array}$ Faye has a medical expense deduction of:

A) $3,150
B) $4,950
C) $10,350
D) $13,350
E) None of these

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

Correct Answer

verified

Show Answer

Question 53

True/False

Review LaterAdd Note

Noah gave $750 to a good friend whose house was destroyed by an earthquake.In addition, Noah contributed his time, valued at $250, in the cleanup effort.Noah may claim a charitable deduction of $1,000 on his tax return for the current year.

Excess charitable contributions that come under the 30%-of-AGI ceiling are always subject to the 30%-of-AGI ceiling in the carryover year.

Charles, who is single and age 61, had AGI of $400,000 during 2019.He incurred the following expenses and losses during the year. $\begin{array} { l r } \text { Medical expenses before AGI floor } & \$ 38,500 \\\text { State and local income taxes } & 15,200 \\\text { Real estate taxes } & 4,400 \\\text { Home mortgage interest } & 5,400 \\\text { Charitable contributions } & 14,800 \\\text { Unreimbursed employee expenses } & 8,900 \\\text { Gambling losses (Charles had } \$ 7,400 \text { of gambling income) } & 9,800\end{array}$ Compute Charles's total itemized deductions for the year.

Linda, who has AGI of $120,000 in the current year, contributes stock worth $65,000 in Mauve Corporation (a publicly traded corporation) to the Salvation Army, a qualified charitable organization.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 that she carries over any disallowed contribution from the current year to future years? b.Describe the restrictions that apply when calculating the deduction in the carryover years.

Diane contributed a parcel of land to the United Way.In addition, she contributed bibles and song books from her proprietorship's book store inventory to First Church, a qualified charitable organization.Should Diane's charitable contribution deduction for these contributions be determined by the basis or fair market value of the contributed items?

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.

Interest paid or accrued during 2019 on aggregate acquisition indebtedness of $2 million or less ($1 million or less for married persons filing separate returns) is deductible as qualified residence interest.

Marilyn, age 38, is employed as an architect.For calendar year 2019, she had AGI of $204,000 and paid the following medical expenses: $\begin{array} { l r } \text { Medical insurance premiums } & \$ 7,800 \\\text { Doctor bills for Peter and Esther (Marilyn's parents) } & 7,300 \\\text { Doctor and dentist bills for Marilyn } & 11,100 \\\text { Prescription medicines for Marilyn } & 750 \\\text { Nonprescription insulin for Marilyn } & 950\end{array}$ Peter and Esther would qualify as Marilyn's dependents except that they file a joint return.Marilyn's medical insurance policy does not cover them.Marilyn filed a claim for reimbursement of $6,000 of her own expenses with her insurance company in December 2019 and received the reimbursement in January 2020.What is Marilyn's maximum allowable medical expense deduction for 2019?

Mason, a physically handicapped individual, pays $10,000 this year for the installation of wheelchair ramps, support bars, and railings in his personal residence.These improvements increase the value of his personal residence by $2,000.Only $8,000 of the expenditure qualifies as a medical expense for tax purposes.

Harry and Sally were divorced three years ago.In July of the current year, their son, Joe, broke his arm falling out of a tree.Joe lives with Sally, and she claims him as a dependent on her tax return.Harry paid for the medical expenses related to Joe's injury.Can Harry claim the medical expenses he paid for Joe on his tax return?

Leona borrows $100,000 from First National Bank and uses the proceeds to purchase City of Houston bonds.The interest Leona pays on this loan is deductible as investment interest subject to the investment interest limits.

Richard, age 50, is employed as an actuary.For calendar year 2019, he had AGI of $130,000 and paid the following medical expenses: $\text {Medical insurance premiums} \quad\$ 5,300$ $\begin{array} { l r } \text { Doctor and dentist bills for Derrick and Jane (Richard's parents) } & 7,900 \\\text { Doctor and dentist bills for Richard } & 5,100 \\\text { Frescribed medicines for Richard } & 830 \\\text { Nonprescribed insulin for Richard } & 960\end{array}$ 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 2019 and received the reimbursement in January 2020.What is Richard's maximum allowable medical expense deduction for 2019?

Maria made significant charitable contributions of capital gain property in the current year.In fact, the amount of the contributions exceeds 30% of her AGI.The excess charitable contribution that is not deductible this year can be carried over for five years.

Paul, a calendar year single taxpayer, has the following information for 2019: $\begin{array} { l r } \text { AGI } & \$ 175,000 \\\text { State income taxes } & 13,500 \\\text { State sales tax } & 3,000 \\\text { Real estate taxes } & 18,900 \\\text { Gambling losses (gambling gains were } \$ 12,000 \text { ) } & 6,800\end{array}$ Paul's allowable itemized deductions for 2019 are:

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.

Bill paid $2,500 of medical expenses for his daughter, Marie.She is married to John and they file a joint return.Bill can include the $2,500 of expenses when calculating his medical expense deduction.

In the current year, Jerry pays $8,000 to become a charter member of Mammoth University's Athletic Council.The membership ensures that Jerry will receive choice seating at all of Mammoth's home basketball games.Also this year, Jerry pays $2,200 (the regular retail price) for season tickets for himself and his wife.For these items, how much qualifies as a charitable contribution?