Question 1

Expenditures for long-term care insurance premiums qualify as a medical expense deduction subject to an annual limit based upon the age of an individual.

Accepted Answer

Long-term care insurance premiums can be claimed as a medical expense deduction on tax returns, subject to an age-based limit.

Question 2

Assessments made against real estate for the purpose of funding local improvements are not deductible in the year paid but rather should be added to the cost basis of the property.

Accepted Answer

According to the IRS, assessments made against real estate for local improvements (such as sidewalks, sewers, or streets) are considered part of the property's cost basis and should be added to the amount you paid for the property. They are not deductible in the year paid.

Question 3

Assessments or fees imposed for specific privileges or services are not deductible as taxes.

Accepted Answer

According to the IRS, assessments or fees imposed for specific privileges or services, such as a charge for a hunting license or a fee for a driver's license renewal, are not considered taxes and are therefore not deductible.

Question 4

If a medical expense reimbursement is received in a year after a deduction has been taken on a previous year's return,the previous year's return must be amended to eliminate the reimbursed expense.

Accepted Answer

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Question 5

A medical expense is generally deductible only in the year in which the expense is actually paid.

Accepted Answer

This is true according to IRS guidelines. Medical expenses can only be deducted in the year in which they were paid, regardless of when the services were provided.

Question 6

If a prepayment is a requirement for the receipt of the medical care,the payment is deductible in the year paid rather than the year in which the care is rendered.

Accepted Answer

Prepayments for medical care are considered deductible in the year they are paid, regardless of when the care is actually received. This is true whether the payment is for an insurance premium, a deposit for a surgical procedure, or any other type of prepayment for medical services.

Question 7

Expenditures incurred in removing structural barriers in the home of a physically handicapped individual are deductible only to the extent the cost exceeds the increase in fair market value to the property attributable to the capital expenditure.

Accepted Answer

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Question 8

Foreign real property taxes and foreign income taxes are not deductible as itemized deductions.

Accepted Answer

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Question 9

Expenditures for a weight reduction program are deductible if recommended by a physician to treat a specific medical condition such as hypertension caused by excess weight.

Accepted Answer

According to the IRS, expenses for a weight reduction program can be deducted if it is recommended by a physician to treat a specific medical condition such as hypertension caused by excess weight.

Question 10

Jeffrey,a T.V.news anchor,is concerned about the wrinkles around his eyes.Because it is job-related,the cost of a face lift to eliminate these wrinkles is a deductible medical expense.

Accepted Answer

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Question 11

Capital expenditures for medical care which permanently improve or better the taxpayer's property are deductible to the extent the cost exceeds the increase in fair market value to the property attributable to the capital expenditure.

Accepted Answer

This is in accordance with the IRS guidelines, specifically under Publication 502: Medical and Dental Expenses.

Question 12

Due to stress on the job,taxpayer Charlie began to experience chest pains.In order to relax and relieve the pains,he and his spouse went on an ocean cruise.The cost of the cruise to alleviate this medical condition is tax deductible.

Accepted Answer

The cost of a vacation, including a cruise, is generally not tax deductible as a medical expense. The IRS allows deductions for medical expenses that are primarily for the prevention or alleviation of a physical or mental defect or illness. While relaxation can certainly be beneficial to one's health, a vacation is not considered a medical expense unless it is specifically prescribed by a doctor as part of treatment.

Question 13

In 2014,medical expenses are deductible as a from AGI deduction to the extent that they exceed 7.5 percent of the taxpayer's AGI.

Accepted Answer

Starting from 2013, the threshold for deducting medical expenses from AGI is increased to 10 percent. However, there is an exception for taxpayers who are 65 or older, they can still use the 7.5 percent threshold until 2016.

Question 14

The definition of medical care includes preventative measures such as routine physical examinations.

Accepted Answer

The definition of medical care includes preventative measures such as routine physical examinations along with diagnosis and treatment of illnesses and injuries.

Question 15

Medical expenses incurred on behalf of children of divorced parents are deductible by the parent who pays the expenses but only if that parent also is entitled to the dependency exemption.

Accepted Answer

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Question 16

A personal property tax based on the weight of the property is deductible.

Accepted Answer

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Question 17

For individuals,all deductible expenses must be classified as deductions for AGI or deductions from AGI.

Accepted Answer

All deductible expenses for individuals must be classified as either deductions for AGI (above-the-line) or deductions from AGI (below-the-line). Deductions for AGI reduce the taxpayer's gross income, while deductions from AGI reduce the taxpayer's taxable income.

Question 18

In order for a taxpayer to deduct a medical expense,the amount must be paid to a certified medical doctor (M.D.).

Accepted Answer

The amount does not necessarily have to be paid to a certified medical doctor (M.D.). It can be paid to other qualified medical professionals such as dentists, chiropractors, or psychologists, among others. However, the expense must be considered a qualified medical expense according to IRS guidelines in order for it to be deductible.

Question 19

If the principal reason for a taxpayer's presence in an institution is the need and availability of medical care,the entire cost of lodging and meals is considered qualified medical expenditures.

Accepted Answer

According to IRS Publication 502, if a taxpayer's primary reason for staying in an institution is to receive medical care, the entire cost of lodging and meals is considered a qualified medical expense for tax purposes.

Question 20

Medical expenses paid on behalf of an individual who could be the taxpayer's dependent except for the gross income or joint return tests are deductible as itemized deductions.

Accepted Answer

Medical expenses paid on behalf of a dependent who meets all requirements except for the gross income or joint return tests can be claimed as itemized deductions on the taxpayer's return.

Quiz 14: Itemized Deductions