Question 1

During the year, George Gable, age 66, and his wife, age 61, incurred and paid the following medical expenses for which they received no reimbursement:
  George also paid $1,000 for prescription drugs for his dependent brother, age 78. Assuming the Gables' adjusted gross income for the year was $70,000, what is the amount that they may claim as a medical deduction on a joint return?

Accepted Answer

The answer of During the year, George Gable, age 66,...

Question 2

John Jones incurred the following interest items for the current year:
  He earned $3,000 in investment income from the investments. What is his itemized interest deduction?

Accepted Answer

The answer of John Jones incurred the following interest items...

Question 3

Which of the following would Diana Collier deduct as an itemized deduction in 2012?

Accepted Answer

The answer of Which of the following would Diana Collier...

Question 4

Frank Fox won $10,000 in a state lottery. He also lost $3,000 at the horse races. On his income tax return he should report:

Accepted Answer

Gambling winnings are reported as gross income and gambling losses are deductible to the extent of winnings as itemized deductions.

Question 5

Kenneth Kruise purchased a personal residence for $66,000. It had a fair market value of $80,000 in the current year when it was damaged by a ﬁre. fte fair market value after the ﬁre was $40,000 and insurance proceeds totaled $15,000. What is the net amount of casualty loss he can claim if his adjusted gross income is $20,000?

Accepted Answer

the reduction in fair market value is less than the basis; thus, that amount must be reduced by the insurance proceeds, $100 and 10 percent of adjusted gross income because of the nonbusiness casualty loss.
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Question 6

Gwen had the following occur in the current year: • Car wreck - repairs were $2,000, insurance paid $1,000.
• fteft of boat from lake house in December - fair market value = $10,000, cost = $15,000. She didn't discover the theft until the next taxable year.
• Storm damage to lake house - FMV before = $200,000, after = $150,000, insurance paid $20,000.
If Gwen's AGI is $60,000, what is her net casualty loss deduction in the current year?

Accepted Answer

the deduction is computed as follows:
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Question 7

In the current year, John Barraclough has $50,000 of adjusted gross income, a $10,000 casualty loss and a $2,000 casualty gain. How much is John's net deductible casualty loss after making all appropriate reductions?

Accepted Answer

the deduction is $10,000 - $100 - $5,000 - $2,000 = $2,900.

Question 8

In the current year, Philip Carlton's personal-use sailboat is destroyed by high winds during a storm. fte fair market value of the vessel immediately before the loss is $16,000. Philip's adjusted gross income for the year is
$86,000. Compute Philip's casualty loss for the year.

Accepted Answer

The answer of In the current year, Philip Carlton's personal-use...

Question 9

In the current year, Larry Jones was involved in a collision which totally destroyed his car. fte automobile, which cost $24,000 and had a fair market value of $10,200 right before the accident, was used solely for personal use. fte car had no value after the accident. Assuming that Larry had adjusted gross income of $70,000 and carried no collision insurance, what amount can he deduct as a net casualty loss for the year?

Accepted Answer

The answer of In the current year, Larry Jones was...

Question 10

Which of the following interest expenses are deductible on a federal income tax return?

Accepted Answer

The answer of Which of the following interest expenses are...

Question 11

In the current year, Rene Rogers has adjusted gross income of $40,000. She has medical expenses of $5,000 and $3,000 of miscellaneous itemized deductions subject to the two-percent-of-AGI limit. In addition, she has a casualty loss of $6,000 and state income taxes of $1,500. Compute the deductible amounts of these items for regular tax purposes.

Accepted Answer

The answer of In the current year, Rene Rogers has...

Question 12

A contribution made to the following donee is not deductible:

Accepted Answer

Charitable contributions must be made to charities that are incorporated in the United States.

Question 13

Lisa incurred the following employee business expenses: Meals $2,000 Lodging $4,000
Her employer reimburses her a total of $4,500 for all of these expenses under an accountable plan. Ignoring any ﬂoor based on percent of AGI, what is her deduction for these expenses?

Accepted Answer

$1500/$6000, or 25% of each expense, is not reimbursed, and 50% of the unreimbursed meal expense is not deductible
 ftat means that the following amounts of each expense are deductible:
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Question 14

Unreimbursed expenses of employees are considered to be deductions:

Accepted Answer

Unreimbursed expenses of employees are deductible from AGI.

Question 15

fte following taxes were paid by the Allens in the current year-real estate taxes on their home, $1,800; state income taxes, $750; city sales tax, $350; and state gasoline tax (personal use of automobile), $30. In itemizing their deductions, what is the maximum amount that the Allens may claim as a deduction for taxes?

Accepted Answer

The answer of fte following taxes were paid by the...

Question 16

Jim Jeeves is a self-employed individual. During the current year, his car which he used 70 percent of the time for business and 30 percent for pleasure was totally destroyed in an accident. fte car had a fair market value of
$26,000 before the accident, which was less than the car's adjusted basis. Jim received only $2,000 as a recovery from his insurance company. His adjusted gross income is $48,000. What is the amount of the personal casualty loss deduction that Jim can report as an itemized deduction for the year?

Accepted Answer

The answer of Jim Jeeves is a self-employed individual. During...

Question 17

Private foundations are organizations which do not normally receive donations:

Accepted Answer

Private foundations are organizations which normally do not receive donations from the general public

Question 18

Carl Craft's adjusted gross income is $80,000. He gave $8,000 cash to his church. He also donated land with a fair market value of $60,000 to Cleveland State University. fte land had cost Carl $30,000 in 1988. Finally, he contributed $6,000 to a private scholarship foundation to which the 20 percent limitation applies. Carl does not elect the optional reduction of the land contribution. What is Carl's charitable contribution deduction for the year?

Accepted Answer

The answer of Carl Craft's adjusted gross income is $80,000....

Question 19

Miscellaneous itemized deductions are deductible only:

Accepted Answer

Miscellaneous itemized deductions can only be deducted to the extent that in aggregate they exceed two percent of the taxpayer's adjusted gross income (AGI). Therefore, choice A is correct. Choices B and C are incorrect as they suggest that miscellaneous itemized deductions can only be claimed if the taxpayer takes the standard deduction or if they fall below the limit on standard itemized deductions, which is not true.

Quiz 8: Deductions: Itemized Deductions

John Jones incurred the following interest items for the current year: He earned $3,000 in investment income from the investments. What is his itemized interest deduction?