Question 1

Jill currently lives in the suburbs and commutes 25 miles to her office in downtown Freeport. She is considering quitting her current job to look for new employment in the downtown area. Which of the following statements best describes how Jill can satisfy the distance test for deducting moving expenses if she accepts a new job in downtown Freeport?

Accepted Answer

A)   Jill must move at least 25 miles further away from downtown Freeport.
B)   Jill must move 25 miles east from downtown Freeport.
C)   Jill must move 50 miles further away from downtown Freeport.
D)   Jill need not move her residence because she is starting a new job.
E)   Jill cannot satisfy the distance test if she accepts a job in downtown Freeport.F) A) and E)
G) A) and D)

Question 2

Which of the following is a true statement?

Accepted Answer

A)   Employees cannot claim business expense deductions.
B)   Employees can claim business expense deductions for AGI.
C)   Employees can claim business expense deductions as miscellaneous itemized deductions not subject to the 2 percent of AGI limitation.
D)   Employees can claim business expense deductions as miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
E)   None of these is true.F) C) and D)
G) B) and C)

Question 3

Which of the following is a miscellaneous itemized deduction that is not subject to the 2 percent of AGI floor?

Accepted Answer

A)   gambling losses to the extent of gambling winnings
B)   fees for investment advice
C)   employee business expenses
D)   tax preparation fees
E)   All of these are subject to the 2 percent of AGI floor limit.F) B) and D)
G) A) and D)

Question 4

Which of the following is a true statement?

Accepted Answer

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 activities is critical for determining whether a deduction is claimed above the line (for AGI)  or below the line (itemized) .
E)   All of these are trueF) B) and C)
G) B) and D)

Question 5

Detmer is a successful doctor who earned $204,800 in fees this year, but he also competes in weekend golf tournaments. Detmer reported the following expenses associated with competing in almost a dozen tournaments: $\begin{array}{llcc}
  \text { Transportation to various tournaments } &\$3,450  \
 \text { Lodging } &1,890\
 \text { Entry fees } &920\
 \text { Golf supplies (balls, tees, etc.) } &75\
\end{array}$
 This year Detmer won $5,200 from competing in various golf tournaments. Assuming that Detmer itemizes his deductions, what amount of the golfing expenses are deductible after considering all limitations if the tournament golfing is treated as a hobby activity?

Accepted Answer

$1,000 = $...

Question 6

Which of the following is a true statement?

Accepted Answer

A)   For purposes of the deduction for educational interest, an educational loan must be used to pay tuition to any type of school.
B)   The maximum deduction for educational interest is $5,000 for married taxpayers filing jointly.
C)   Self-employed taxpayers are not allowed to deduct health care premiums if the taxpayer is eligible to participate in their spouse's employer-provided health plan.
D)   Self-employment taxes paid by self-employed taxpayers are deductible as business expenses.
E)   All of these are true.F) A) and C)
G) A) and E)

Question 7

Taxpayers filing single and taxpayers filing married separate have the same basic standard deduction amount.

Accepted Answer

A) True 
 B)False

Question 8

Which of the following costs are deductible as an itemized medical expense?

Accepted Answer

A)   The cost of prescription medicine and over-the-counter drugs.
B)   Medical expenses incurred to prevent disease.
C)   The cost of elective cosmetic surgery.
D)   Medical expenses reimbursed by health insurance.
E)   None of these costs is deductible.F) B) and E)
G) None of the above

Question 9

Justin and Georgia file married jointly with one dependent. This year, their AGI is $319,050. What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

Accepted Answer

The answer of Justin and Georgia file married jointly with...

Question 10

This year Darcy made the following charitable contributions: $$\begin{array} { l l r r } 
{ \underline { \text { Donee } } } & \underline { \text { Property } } & \underline { \text { Cost } } & \underline { \text { FMV } } \
\text { State University } & \text { IBM stock } & \$ 15,000 & \$ 10,500 \
\text { Salvation Army } & \text { clothes } & 2,500 & 500 \
\text { State Art Museum } & \text { painting } & 5,000 & 45,000 \
\text { City Hospital } & \text { cash } & 8,000 &
\end{array}$$ Determine the maximum amount of charitable deduction for Darcy's contribution of the painting if her AGI is $80,000 this year. You may assume that both the stock and painting have been owned for 10 years.

Accepted Answer

The charitable deduc...

Question 11

Brice is a single, self-employed electrician who earns $60,000 per year in self-employment income. Brice paid the following expenses this year. Which of the expenses are deductible for AGI? 
1. The cost of health insurance (not purchased through an exchange) 
2. The employer portion of self-employment tax paid
3.Penalty on early withdrawal of funds from a certificate of deposit

Accepted Answer

A)   Numbers 1 and 2 only.
B)   Numbers 1 and 3 only.
C)   Numbers 2 and 3 only.
D)   None of these is deductible for AGI.
E)   All of these are deductible for AGIF) A) and E)
G) A) and D)

Question 12

Self employed taxpayers can choose between claiming a deduction or a credit for the employer portion of self employment taxes paid.

Accepted Answer

A) True 
 B)False

Question 13

Jim was in an auto accident this year. Jim paid $2,450 to repair his car after the accident and his insurance only reimbursed him $400. Jim bought his car several years ago for $1,500. What is the amount of casualty loss from this accident before Jim applies any casualty loss floor limitations?

Accepted Answer

A)   $2,450
B)   $2,050
C)   $1,500
D)   $1,100
E)   None of these is correct.F) C) and E)
G) A) and D)

Question 14

Which of the following is a true statement?

Accepted Answer

A)   All business expenses are deducted for AGI.
B)   Investment expenses are typically deducted for AGI.
C)   Tax preparation fees are deducted for AGI.
D)   Rental and royalty expenses are deducted for AGI.
E)   All of theseF) C) and D)
G) A) and D)

Question 15

Shelby is working as a paralegal while attending law school at night. This year she has incurred the following expenses associated with school. $$\begin{array} { l r } 
\text { Tuition } & \$ 22,700 \
\text { Room and board } & 9,200 \
\text { Books } & 1,600 \
\text { Transportation to work } & 350
\end{array}$$ What amount can Shelby deduct as an employee business expense if her modified AGI this year is $25,000?

Accepted Answer

The answer of Shelby is working as a paralegal while...

Question 16

Casey currently commutes 35 miles to work in the city. He is considering a new assignment in the suburbs on the other side of the city that would increase his commute considerably. He would like to accept the assignment, but he thinks it might require that he move to the other side of the city. Which of the following is a true statement?

Accepted Answer

A)   Casey can deduct moving expenses if the distance between his current residence and his new assignment is at least 50 miles.
B)   If Casey's move qualifies for the moving expense deduction, he can deduct the cost of meals while en route to his new residence.
C)   To qualify for a moving expense deduction the new commute from Casey's current residence would need to be a minimum of 85 miles.
D)   If Casey's move qualifies for the moving expense deduction, he can deduct half the cost of meals while en route to his new residence.
E)   All of these are false.F) C) and D)
G) A) and B)

Question 17

Bunching itemized deductions is one form of tax evasion.

Accepted Answer

A) True 
 B)False

Question 18

Which of the following is a true statement?

Accepted Answer

A)   Traveling from a personal residence to a place of business is deducted for AGI as a moving expense.
B)   Traveling from a personal residence to a place of business is a miscellaneous itemized deduction subject to the 2 percent of AGI limitation.
C)   The standard mileage rate can be used to calculate the deduction for traveling from a personal residence to a place of business.
D)   Traveling from a personal residence to a place of business is deductible if reimbursed by an employer.
E)   Traveling from a personal residence to a place of business is nondeductible.F) A) and E)
G) A) and C)

Question 19

Which of the following is a true statement?

Accepted Answer

A)   Congress allows self-employed taxpayers to deduct the employer portion of their self-employment tax.
B)   To deduct expenses associated with any profit motivated activity taxpayers must maintain a high level of involvement or effort in the activity throughout the year.
C)   Business activities never require a relatively high level of involvement or effort from the taxpayer.
D)   All business expenses are deducted for AGI.
E)   All of these are true.F) C) and D)
G) B) and D)

Question 20

Which of the following is a true statement?

Accepted Answer

A)   The deduction for interest on educational loans is subject to a phase-out limitation.
B)   The deduction for moving expenses is subject to a phase-out limitation.
C)   Self-employed taxpayers are allowed to deduct health care premiums even if the taxpayer is eligible to participate in an employer-provided health plan.
D)   Taxpayers are not allowed to receive a moving allowance from their employers.
E)   All of these are false.F) A) and C)
G) None of the above

Exam 6: Individual Deductions

Correct Answer
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Taxpayers filing single and taxpayers filing married separate have the same basic standard deduction amount.

Correct Answer
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Which of the following is a true statement?

Correct Answer
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Justin and Georgia file married jointly with one dependent. This year, their AGI is $319,050. What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

Correct Answer
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Which of the following is a miscellaneous itemized deduction that is not subject to the 2 percent of AGI floor?

Correct Answer
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Which of the following is a true statement?

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Self employed taxpayers can choose between claiming a deduction or a credit for the employer portion of self employment taxes paid.

Correct Answer
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Correct Answer
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Which of the following is a true statement?

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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?

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Correct Answer
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The charitable deduc...
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Which of the following is a true statement?

Correct Answer
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Correct Answer
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Which of the following costs are deductible as an itemized medical expense?

Correct Answer
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Bunching itemized deductions is one form of tax evasion.

Correct Answer
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Which of the following is a true statement?

Correct Answer
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Jim was in an auto accident this year. Jim paid $2,450 to repair his car after the accident and his insurance only reimbursed him $400. Jim bought his car several years ago for $1,500. What is the amount of casualty loss from this accident before Jim applies any casualty loss floor limitations?

Correct Answer
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Correct Answer
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$1,000 = $...
View Answer

Exam 6: Individual Deductions

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Taxpayers filing single and taxpayers filing married separate have the same basic standard deduction amount.

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

Justin and Georgia file married jointly with one dependent. This year, their AGI is $319,050. What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

Correct AnswerverifiedShow Answer

Which of the following is a miscellaneous itemized deduction that is not subject to the 2 percent of AGI floor?

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Which of the following is a true statement?

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Self employed taxpayers can choose between claiming a deduction or a credit for the employer portion of self employment taxes paid.

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Correct AnswerverifiedShow Answer

Which of the following is a true statement?

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Which of the following is a true statement?

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Which of the following is a true statement?

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Correct AnswerverifiedThe charitable deduc...View AnswerShow Answer

Which of the following is a true statement?

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Correct AnswerverifiedShow Answer

Which of the following costs are deductible as an itemized medical expense?

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Bunching itemized deductions is one form of tax evasion.

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

Jim was in an auto accident this year. Jim paid $2,450 to repair his car after the accident and his insurance only reimbursed him $400. Jim bought his car several years ago for $1,500. What is the amount of casualty loss from this accident before Jim applies any casualty loss floor limitations?

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Correct Answerverified$1,000 = $...View AnswerShow Answer

Correct Answer
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Correct Answer
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The charitable deduc...
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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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$1,000 = $...
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