Deck 5: Deductions for Individuals and Tax Determination

Question 1

In 2019 safe deposit box rental fees are deductible as miscellaneous itemized deductions and must exceed two percent of AGI to be deductible.

Answer 1

False

Question 2

Sales taxes levied on the purchase of depreciable business property are deductible as part of depreciation.

Answer 2

True

Question 3

Surviving spouse status may be claimed for three years after the year of the spouse's death.

Answer 3

False

Question 4

The deduction for student loan interest has limits placed on it based on the taxpayer's AGI.

Question 5

A legally married couple can elect to file as married filing jointly or single individuals.

Question 6

A non-itemizer's standard deduction is phased out at a certain AGI threshold.

Question 7

For 2018-2025, the personal and dependency exemption is essentially zero.Although the deduction is suspended, the rules for determining who is a dependent may be used in other provisions (such as determining head of household status and the child tax credit).

Question 8

The basic and additional standard deductions are both indexed for inflation.

Question 9

Up to $10,000 ($5,000 if married filing separately) of income and real property taxes are deductible for state, local, and foreign real property.

Question 10

A homeowner who itemizes his or her deductions can only deduct the property taxes on his or her primary residence and one other residence.

Question 11

Health insurance premiums that are deductible as medical expenses include premiums paid pre-tax through a flexible spending account.

Question 12

Contributions to health savings accounts are made with before-tax dollars.

Question 13

To file as a surviving spouse, a taxpayer must maintain a home for a dependent child for the entire year.

Question 14

The tax model is the formula for how individuals report their tax liability.

Question 15

An abandoned spouse must only live apart from his or her spouse during the last six months of the tax year.

Question 16

A married person filing a separate return has the lowest standard deduction amount.

Question 17

Jan and James's divorce is final on December 31 of the current year.They must file married filing separately for the tax year.

Question 18

To qualify as head of household, the taxpayer must pay more than half of the costs of a home in which a qualifying person lives for the entire year.

Question 19

A taxpayer's filing status determines the basic standard deduction allowed.

Question 20

Beginning in 2019, qualified medical expenses for a 66-year-old single individual must exceed 10 percent of AGI to be deductible for regular income tax purposes.

Question 21

29 The tax rate applied to the AMTI for individuals is 2 percent higher than the top individual regular tax rate.

Question 22

A taxpayer's standard deduction is limited by the taxpayer's AGI if AGI exceeds a certain threshold.

Question 23

The alternative minimum tax is a tax determined on a broadened definition of income with no deductions permitted.

Question 24

Sebastian (age 46) and Kaitlin (age 45) are married and file a joint tax return.Their 2019 adjusted gross income is $390,000 and includes $2,600 in investment income ($2,000 in short-term capital gains and $600 of interest income).They provided 100% of the support for their daughter, Olivia, age 26, who lives with them, and earned $4,700 from her part-time job.They also provided 100 percent of the support for Sebastian's mother, Emily, who is 67, blind, and lives in a nursing home.Emily received $4,000 in Social Security benefits and $450 of interest income.What is Sebastian and Kaitlin standard deduction on their 2019 tax return if they do not itemize?

A)$13,850
B)$12,900
C)$24,400
D)$25,700

Question 25

A parent cannot be considered as a dependent if his or her gross income equals or exceeds the amount of the dependency exemption.

Question 26

Carl, age 42, is married and has three children.In preparing to go to his accountant, he determines that he has $63,500 of salary income and $250 in dividends.He contributes $4,000 to a Roth IRA and has $6,800 of itemized deductions.His wife has no income.What is the taxable income on their 2019 joint return?

A)$39,350
B)$35,350
C)$56,950
D)$30,250

Question 27

Lisa's husband died in 2016.Lisa did not remarry, and continued to maintain a home for herself and her dependent daughter during 2017, 2018, and 2019 providing full support for herself and her daughter during these years.For 2019, Lisa's filing status is:

A).Single
B)Married filing separately
C)Head of household
D)Surviving spouse, using married filing jointly rate

Question 28

Which of the following filing statuses can never be used by a single individual?

A)Surviving spouse
B)Head of household
C)Married filing separately
D)Single

Question 29

The additional 0.9 percent Medicare surtax applies to earned income of individuals with wages in excess of $200,000 but does not apply to self-employed individuals.

Question 30

Qualifying low-income wage earners may not only deduct their IRA contributions but they may take a credit for their contribution.

Question 31

Which of the following expenditures is not subject to some form of limitation on its deductibility based on AGI?

A)IRA contribution
B)Surgery to replace a hip joint
C)Contribution to a university endowment fund
D)Property taxes

Question 32

The maximum annual lifetime learning credit is $2,000 per taxpayer.

Question 33

In 2019, which of the following is allowed as an addition to a nonitemizer's standard deduction?

A)Sales tax on new automobile purchases
B)$500 for real property taxes
C)Medical expenses in excess of 10% of AGI
D)None of the above

Question 34

All of the following are deductions for AGI except:

A)IRA contributions
B)Student loan interest
C)Interest on loan to purchase stocks
D)Health Savings Account contribution

Question 35

28 The NII tax is assessed on the greater of net investment income or modified adjusted gross income.

Question 36

Which of the following is a requirement to file for head of household?

A)A single individual (except abandoned spouse)
B)Provides over one-half the cost of maintaining a household for a dependent or a child
C)Qualifying dependent (except a parent) or child must live in the taxpayer's household
D)All of the above are requirements

Question 37

The taxpayer must provide more than half the support for an individual to be considered a dependent.

Question 38

Ethan, age 67, and Abigail, age 64, with good eyesight, are married and file a joint tax return.They have adjusted gross income of $1,200,000 for 2019.They have only $5,000 of itemized deduction, so they claim their standard deduction.How much of their standard deduction is phased out in 2019?

A)$13,850
B)$12,600
C)$10,682
D)0

Question 39

The 2019 standard deduction for a married taxpayer, age 68, who files a separate return is:

A)$12,200
B)$13,500
C)$13,850
D)$24,400
E)$25,700

Question 40

Taxpayers can apply any excess FICA tax paid to their income tax liability.

Question 41

Sebastian (age 46) and Kaitlin (age 45) are married and file a joint tax return.Their 2019 adjusted gross income is $390,000 and includes $2,600 in investment income ($2,000 in short-term capital gains and $600 of interest income).They provided 100% of the support for their daughter, Olivia, age 26, who lives with them, and earned $4,700 from her part-time job.They also provided 100 percent of the support for Sebastian's mother, Emily, who is 67, blind, and lives in a nursing home.Emily received $4,000 in Social Security benefits and $450 of interest income.Sebastian and Kaitlin also paid the following amounts in 2019: -$38,500 interest on their home mortgage (acquisition debt) on their principal residence purchased in 1995.The principal amount of the mortgage is $1,250,000.
-They also paid $8,250 in real estate taxes on the home.
-$6,000 investment interest expense
-$7,600 unreimbursed employee business expenses (none for meal or entertainment expenses)
-$1,650 in state income taxes to the state of California where Sebastian worked for part of the year
-$1,400 in state and local general sales taxes
-$490 in fees to their CPA for preparation of their tax return
-$2,500 contributed to the State University Athletic Booster Club (to allow them to purchase tickets in good seat locations for football games) and $1,000 contributed to the State University Business School Alumni Association for academic scholarships.They also donated a painting (purchased 11 years ago for $4,200) to the Salvation Army, which was then sold for its fair market value of $17,000 at its fundraising auction.
What is Sebastian and Kaitlin's taxable income for 2019 if they do not itemize their deductions and file as married filing jointly?

A)$341,500
B)$365,600
C)$377,800
D)$390,000

Question 42

Sebastian (age 46) and Kaitlin (age 45) are married and file a joint tax return.Their 2019 adjusted gross income is $390,000 and includes $2,600 in investment income ($2,000 in short-term capital gains and $600 of interest income).They provided 100% of the support for their daughter, Olivia, age 26, who lives with them, and earned $4,700 from her part-time job.They also provided 100 percent of the support for Sebastian's mother, Emily, who is 67, blind, and lives in a nursing home.Emily received $4,000 in Social Security benefits and $450 of interest income.Sebastian and Kaitlin also paid the following amounts in 2019: -$38,500 interest on their home mortgage (acquisition debt) on their principal residence purchased in 1995.The principal amount of the mortgage is $1,250,000.
-They also paid $8,250 in real estate taxes on the home.
-$6,000 investment interest expense
-$7,600 unreimbursed employee business expenses (none for meal or entertainment expenses)
-$1,650 in state income taxes to the state of California where Sebastian worked for part of the year
-$1,400 in state and local general sales taxes
-$490 in fees to their CPA for preparation of their tax return
-$2,500 contributed to the State University Athletic Booster Club (to allow them to purchase tickets in good seat locations for football games) and $1,000 contributed to the State University Business School Alumni Association for academic scholarships.They also donated a painting (purchased 11 years ago for $4,200) to the Salvation Army, which was then sold for its fair market value of $17,000 at its fundraising auction.
What is Sebastian and Kaitlin's marginal tax rate for 2019 if they itemize their deductions and file as married filing jointly?

A)12%
B)22%
C)24%
D)32%

Question 43

Vera and Jake (both age 45) are a married couple with AGI of $327,300 for 2019.They paid $20,000 of mortgage interest, $8,000 of unreimbursed medical expenses, $4,000 of property taxes, and $9,000 of charitable contributions for the year.How much may they claim for itemized deductions in 2019?

A)$40,220
B)$33,000
C)$32,520
D)$25,000

Question 44

Sebastian (age 46) and Kaitlin (age 45) are married and file a joint tax return.Their 2019 adjusted gross income is $390,000 and includes $2,600 in investment income ($2,000 in short-term capital gains and $600 of interest income).They provided 100% of the support for their daughter, Olivia, age 26, who lives with them, and earned $4,700 from her part-time job.They also provided 100 percent of the support for Sebastian's mother, Emily, who is 67, blind, and lives in a nursing home.Emily received $4,000 in Social Security benefits and $450 of interest income.Sebastian and Kaitlin also paid the following amounts in 2019: -$38,500 interest on their home mortgage (acquisition debt) on their principal residence purchased in 1995.The principal amount of the mortgage is $1,250,000.
-They also paid $8,250 in real estate taxes on the home.
-$6,000 investment interest expense
-$7,600 unreimbursed employee business expenses (none for meal or entertainment expenses)
-$1,650 in state income taxes to the state of California where Sebastian worked for part of the year
-$1,400 in state and local general sales taxes
-$490 in fees to their CPA for preparation of their tax return
-$2,500 contributed to the State University Athletic Booster Club (to allow them to purchase tickets in good seat locations for football games) and $1,000 contributed to the State University Business School Alumni Association for academic scholarships.They also donated a painting (purchased 11 years ago for $4,200) to the Salvation Army, which was then sold for its fair market value of $17,000 at its fundraising auction.
How much can Sebastian and Kaitlin deduct for charitable contributions for 2019?

A)$5,200
B)$7,200
C)$7,700
D)$20,500

Question 45

Which of the following is true regarding miscellaneous itemized deductions?

A)Other investment expenses and tax return preparation fees are included in the miscellaneous category.
B)For 2018 - 2025 no deduction is allowed.
C)Prior to 2018, miscellaneous itemized deductions were only deductible if the total expenses in this category exceed 2% of the taxpayer's AGI.
D)All of the above are true.
E)All of the above are false.

Question 46

Sebastian (age 46) and Kaitlin (age 45) are married and file a joint tax return.Their 2019 adjusted gross income is $390,000 and includes $2,600 in investment income ($2,000 in short-term capital gains and $600 of interest income).They provided 100% of the support for their daughter, Olivia, age 26, who lives with them, and earned $4,700 from her part-time job.They also provided 100 percent of the support for Sebastian's mother, Emily, who is 67, blind, and lives in a nursing home.Emily received $4,000 in Social Security benefits and $450 of interest income.Sebastian and Kaitlin also paid the following amounts in 2019: -$38,500 interest on their home mortgage (acquisition debt) on their principal residence purchased in 1995.The principal amount of the mortgage is $1,250,000.
-They also paid $8,250 in real estate taxes on the home.
-$6,000 investment interest expense
-$7,600 unreimbursed employee business expenses (none for meal or entertainment expenses)
-$1,650 in state income taxes to the state of California where Sebastian worked for part of the year
-$1,400 in state and local general sales taxes
-$490 in fees to their CPA for preparation of their tax return
-$2,500 contributed to the State University Athletic Booster Club (to allow them to purchase tickets in good seat locations for football games) and $1,000 contributed to the State University Business School Alumni Association for academic scholarships.They also donated a painting (purchased 11 years ago for $4,200) to the Salvation Army, which was then sold for its fair market value of $17,000 at its fundraising auction.
How much can Sebastian and Kaitlin deduct for taxes for 2019?

A)$11,000
B)$12,800
C)$9,900
D)$17,500

Question 47

Colin (age 40) is single and itemizes his deductions.His AGI is $100,000.Colin provided the following information about his cash expenditures for 2019: Interest on loan to purchase corporate securities $ 900
Interest on American Express card 1,200
Points to refinance his home at the end of December 2,600
Mortgage interest payments 11,800
Real estate taxes 2,100
State income taxes withheld on salary 5,400
Additional state income tax estimated payment 1,200
Contribution to Republican Party 2,000
Contribution to United Way 500
How much are Colin's deductible contributions?

A)$500
B)$1,000
C)$1,500
D)$2,500

Question 48

Camila, age 60, is single and has adjusted gross income of $100,000.She paid (with after-tax dollars) the following medical expenses in 2019: $\begin{array}{llcc} \text { Medical msurance premiums} & \&9,000\\ \text { Doctors' fees } &5,000\\ \text {Hospital fees } &3,000\\ \text { Eyeglasses } &400\\ \text {Prescription drugs } &300\\ \text {General purpose vitamins } &100\\\end{array}$
She received only $2,000 in reimbursements from her insurance company for her medical expenses.How much can Camila deduct for medical expenses in 2019 if she has $30,000 of other itemized deductions?

A)$8,200
B)$8,300
C)$5,800
D)$5,700

Question 49

Sebastian (age 46) and Kaitlin (age 45) are married and file a joint tax return.Their 2019 adjusted gross income is $390,000 and includes $2,600 in investment income ($2,000 in short-term capital gains and $600 of interest income).They provided 100% of the support for their daughter, Olivia, age 26, who lives with them, and earned $4,700 from her part-time job.They also provided 100 percent of the support for Sebastian's mother, Emily, who is 67, blind, and lives in a nursing home.Emily received $4,000 in Social Security benefits and $450 of interest income.Sebastian and Kaitlin also paid the following amounts in 2019: -$38,500 interest on their home mortgage (acquisition debt) on their principal residence purchased in 1995.The principal amount of the mortgage is $1,250,000.
-They also paid $8,250 in real estate taxes on the home.
-$6,000 investment interest expense
-$7,600 unreimbursed employee business expenses (none for meal or entertainment expenses)
-$1,650 in state income taxes to the state of California where Sebastian worked for part of the year
-$1,400 in state and local general sales taxes
-$490 in fees to their CPA for preparation of their tax return
-$2,500 contributed to the State University Athletic Booster Club (to allow them to purchase tickets in good seat locations for football games) and $1,000 contributed to the State University Business School Alumni Association for academic scholarships.They also donated a painting (purchased 11 years ago for $4,200) to the Salvation Army, which was then sold for its fair market value of $17,000 at its fundraising auction.
How much can Sebastian and Kaitlin deduct for interest expense for 2019?

A)$30,800
B)$33,400
C)$2,600
D)$49,500

Question 50

Ikito's AGI was $68,000 in 2019.In August 2019, his home was damaged in a hurricane and his county was declared a federal declared disaster area, The home's fair market value was $110,000 before the storm and $70,000 after the storm.He received only $12,000 from his insurance company due to the large deductible that applies to hurricane losses.He had purchased the home five years ago for $90,000.How much may Ikito deduct as an itemized deduction for this casualty loss?

A)$0
B)$21,100
C)$27,900
D)$39,900

Question 51

Emma purchased investment land in 2012 for $46,000.At the end of 2018, she was approached by the local Girl Scout organization in which she had been an active troop leader, about donating the land for a summer camp site.Emma agreed and deeded the land to the Girl Scouts for their camp in February 2019.The fair market value of the land at the end of 2018 was $55,000 and in February 2019 was $56,000.Emma's adjusted gross income was $100,000 for 2018 and $110,000 for 2019.Emma expects her AGI to decrease to $10,000 in 2020 because most of her future retirement income will be from tax-exempt sources.What is the maximum amount Emma can deduct for 2019 if this is her only itemized deduction?

A)$46,000
B)$50,000
C)$55,000
D)$56,000

Question 52

Colin (age 40) is single and itemizes his deductions.His AGI is $100,000.Colin provided the following information about his cash expenditures for 2019: Interest on loan to purchase corporate securities $ 900
Interest on American Express card 1,200
Points to refinance his home at the end of December 2,600
Mortgage interest payments 11,800
Real estate taxes 2,100
State income taxes withheld on salary 5,400
Additional state income tax estimated payment 1,200
Contribution to Republican Party 2,000
Contribution to United Way 500
What is Colin's deduction for taxes?

A)$8,700
B)$7,500
C)$5,400
D)$2,100

Question 53

Colin (age 40) is single and itemizes his deductions.His AGI is $100,000.Colin provided the following information about his cash expenditures for 2019: Interest on loan to purchase corporate securities $ 900
Interest on American Express card 1,200
Points to refinance his home at the end of December 2,600
Mortgage interest payments 11,800
Real estate taxes 2,100
State income taxes withheld on salary 5,400
Additional state income tax estimated payment 1,200
Contribution to Republican Party 2,000
Contribution to United Way 500
What is the amount of Colin's deductible interest expense if he received $600 in corporate dividends that are taxed at the 15% tax rate?

A)$11,800
B)$12,400
C)$12,700
D)$14,400

Question 54

Amelia, an accountant, normally bills her clients $125 per hour for her time and her adjusted gross income for 2019 was $100,000.In January and February 2019, however, Amelia spent 80 hours of her time volunteering for the Salvation Army doing accounting work.She paid $100 out of her own pocket for supplies and made an additional cash contribution of $1,000 to the Salvation Army in 2019.What is Amelia's charitable contribution deduction for 2019?

A)$11,100
B)$11,000
C)$1,100
D)$1,000

Question 55

Sonjay had AGI of $60,000 in 2019 and made several charitable contributions as follows: Land donated to county for new school: FMV = $30,000; basis = $20,000
Appraisal fee for the land: $2,500
Contributions to his church: $4,000
Contributions to the Red Cross: $1,000
What is the maximum charitable contribution deduction that Sonjay could claim in 2019?

A)$30,000
B)$27,500
C)$25,000
D)$24,000

Question 56

Patricia's AGI was $80,000 in both 2018 and 2019.She made cash contributions to public charities of $43,000 in 2018 and $50,000 in 2019.Patricia's charitable contribution carryover to 2020 is:

A)$2,000
B)$5,000
C)$8,000
D)$44,000

Question 57

Colin (age 40) is single, itemizes his deductions, and has AGI of $100,000.Colin provided the following information about his cash expenditures for 2019: Interest on American Express card 1,200
Points to refinance his home for 10 years at the end of December 2,600
Mortgage interest payments on $250,000 principal amount 11,800
Real estate taxes 2,100
State income taxes withheld on salary 5,400
Additional state income tax estimated payment 1,200
Contribution to Republican Party 2,000
Contribution to United Way 500
If Colin itemizes, what are his total itemized deductions in 2019:

A)$18,100
B)$21,000
C)$24,200
D)$27,000

Question 58

Which of the following statements is true regarding the deductibility of investment interest expense?

A)Deductible in full subject to the 2% of AGI floor that applies to miscellaneous itemized deductions.
B)Deductible only to the extent of net investment income, excess amounts cannot be carried forward and thus are non-deductible.
C)Deductible only to the extent of the interest on a principal amount that does not exceed $1,000,000.
D)Deductible only to the extent of net investment income; any excess amounts can be carried forward indefinitely.

Question 59

What is Beth's maximum allowable deduction for the following contributions to qualified public charities during the current year if her adjusted gross income is $90,000? $\begin{array}{lrr}\underline{\text {Stock Contributions}}&\underline{\text {Basis }}&\underline{\text {Fair Market Value}}\\ \text { Markum stock acquired in } 1997 & \$ 8,000 & \$ 16,000 \\\text { Dotcom stock acquired in } 1999 & \$ 7,000 & \$ 14,000 \\\text { Ford stock acquired in 2001 } & \$ 1,500 & \$ 3,000\end{array}$

A)$45,000
B)$33,000
C)$27,000
D)$16,500

Question 60

Sean bought a home in 2010 for $625,000 financing $550,000 of the purchase price with a 30 year mortgage.In 2019 when his existing mortgage balance was $520,000, he took out a home equity loan for $150,000.He used the proceeds to pay off credit card debt of $40,000 and purchase a car for $85,000; the balance he used to buy an engagement ring for his girlfriend.In 2019 he paid $30,000 interest on the mortgage and paid interest only of $6,600 on the home equity loan.What is his deduction for qualified residential interest for 2019?

A)$36,600
B)$34,400
C)$30,000
D)$6,600

Question 61

Maurice and Judy (both age 32) have one natural daughter, age 4, and adopted twin boys, age 8.Their adjusted gross income on their joint return is $410,000.If they take the standard deduction, what is their tax liability after any allowable tax credits in 2019 if the child tax credit begins to phase out at $400,000?

A)$86,025
B)$80,525
C)$80,899
D)$64,179

Question 62

To be considered a dependent as a qualifying child in 2019:

A)The child can be age 24
B)A 17-year-old child must earn less than $5,000
C)A 21-year-old child must be a full-time student for at least 5 months during the year
D)All of the above

Question 63

All of the following are qualifying relatives who can qualify as dependents except:

A)Cousin
B)Father-in-law
C)Mother's sister
D)Sister

Question 64

Cindy has taxable income of $67,000 excluding a $20,000 taxable gain on the sale of bonds she purchased 7 years ago.If Cindy is single, what is her total tax liability for 2019?

A)$10,598.50
B)$13,598.50
C)$15,054.50
D)$17,521

Question 65

Marcia and Tim, a married couple, file a joint return in 2019.Marcia went back to college this year as a full-time graduate student.What is the maximum reduction they can achieve in their taxes for the $6,800 in tuition that Marcia pays if their AGI is $118,000 and the LLC phaseout range is $116,000-$136,000?

A)$2,000
B)$1,360
C)$1,224
D)$1,000

Question 66

Cleo's husband died in January of 2017.Cleo provides all of the support for a 20 year-old son and a sister who live with her.Her son attends a trade school part-time and earned $11,000 from his part-time job.Cleo's sister is a full-time student and only earned $2,800 from her part-time job.What is Cleo's 2019 filing status?

A)Surviving spouse
B)Head of household
C)Married filing separately
D)Married filing jointly
E)Single

Question 67

All of the following are a common filing status for a married person except:

A)Married filing jointly
B)Head of household
C)Married filing separately
D)Surviving spouse

Question 68

Susan (age 29) is single but has the son of her brother living with her as her dependent.If her AGI is $27,800, what is her tax liability in 2019 before any allowable tax credits?

A)$900
B)$945
C)$1,486
D)$2,094

Question 69

Stephanie and Cal have three dependent children in college.Sally is a freshman and Teri is a sophomore at a small private college in their town where their expenses are $6,500 per year for each student; Lexi is in her third year of medical school in Wisconsin and her related expenses are $12,500 per year.What is the maximum education credit allowed Stephanie and Cal on their joint tax return if their AGI is $126,000 in 2019 and the LLC phaseout range is $116,000 - $136,000?

A)$5,000
B)$6,000
C)$7,000
D)$7,500

Question 70

Holly and Ken (both age 46) are married and have two children living at home: Sara is 19 and earned $19,000 as a secretary.Claudia is 15 and is in high school.Claudia made $4,200 as a model this year, all of which was put into a trust account except for her manager's fee.Ken made $67,600 as an engineer and Holly earned $7,000 as a substitute teacher.If they have $18,000 of itemized deductions, what is Holly and Ken's tax liability on their joint return in 2019 after any allowable credits?

A)$1,636.00
B)$3,636.00
C)$5,636.00
D)$6,287.50

Question 71

Nonrefundable tax credits

A)allow the excess credit over the taxpayer's income tax liability to be paid to the taxpayer
B)can only be used in years the taxpayer has a tax refund
C)can only offset a taxpayer's tax liability
D)can be carried forward up to 5 years if they exceed the current year's tax liability

Question 72

A single taxpayer, studying for his master's degree, has an AGI of $59,000.In 2019 he paid $8,000 for college tuition and $2,500 interest on his student loan.In 2019 the LLC phaseout range is $58,000-$68,000 and the loan phaseout begins at $70,000.

A)He may deduct $2,500 of student loan interest and claim a lifetime learning credit of $1,600.
B)He may deduct $2,500 of student loan interest but must begin to phase out his $1,600 lifetime learning credit.
C)He must begin to phase out part of his deductions for both student loan interest and his college tuition.
D)He gets no deduction for student loan interest and must reduce his deduction for college tuition.

Question 73

John and Mary have three children: Aaron (age 14), Anna (age 16), and Tammy (age 21).Anna works after school and earned $4,000 in 2019.Tammy works 30 hours per week and is a part-time student at the local community college earning $8,400 in 2019.If John and Mary's AGI in 2019 is $200,000, how much can they claim on their joint tax return for the child tax credit?

A)$6,000
B)$4,500
C)$4,000
D)$2,000

Question 74

What is the difference in tax savings between a $1,000 tax credit and a $1,000 tax deduction for a single taxpayer with $45,000 in taxable income?

A)0
B)$850
C)$780
D)$300

Question 75

To qualify as a dependent in 2019, most individuals (except a qualifying child) must earn gross income that is less than:

A)$4,200
B)$12,200
C)$16,400
D)There is no gross income test to determine dependency status for a relative.

Question 76

Susan pays $4,700 for daycare for her dependent mother who had a stroke last year.What is her dependent care credit if her AGI is $40,100 if the phaseout begins at $15,000?

A)$600
B)$660
C)$940
D)$1,034

Question 77

Which of the following is a refundable credit?

A)Dependent care credit
B)Residential energy credit
C)Lifetime learning credit
D)Earned income credit

Question 78

In 2019, Carol, who is 54 and single, earned a salary of $54,000 and $6,000 of interest on State of Nevada bonds.She contributed $2,000 to her Roth IRA, paid a $13,350 hospital bill, state income taxes of $1,500, real estate taxes of $900, mortgage interest of $4,500, and $2,000 interest on her margin account under which she purchased the bonds.What is Carol's taxable income?

A)$37,050
B)$39,150
C)$41,050
D)$43,050

Question 79

Colin (single and age 40) has AGI of $100,000.Colin provided the following information about his cash expenditures for 2019: Interest on loan to purchase corporate securities $ 900
Interest on American Express card 1,200
Points to refinance his home for 10 years at the end of December 2,600
Mortgage interest payments 11,800
Real estate taxes 2,100
State income taxes withheld on salary 5,400
Additional state income tax estimated payment 1,200
Contribution to Republican Party 2,000
Contribution to United Way 500
If Colin does not itemize, what is his total deduction from AGI in 2019:

A)$4,050
B)$6,350
C)$10,400
D)$12,200

Question 80

Justin, age 42 and divorced, is the sole support of his mother, age 69, who resided in a local nursing home for the entire year.Justin's mother had no income for the year.Justin's filing status is:

A)Single
B)Surviving Spouse
C)Head of household
D)Married filing separately