Question 1

In 2013,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

In 2013, medical expenses were deductible as a from AGI deduction to the extent that they exceed 10 percent of the taxpayer's AGI. The 7.5 percent threshold only applied to taxpayers who were age 65 or older at any time during the tax year.

Question 2

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

False

Question 3

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 have to be paid to an M.D. It can be paid to any licensed medical professional, including dentists, chiropractors, psychologists, and more. The key is that the expense must be considered medically necessary and deductible.

Question 4

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

Assessments made against real estate for the purpose of funding local improvements, such as sidewalks, streetlights or road repairs, are considered capital expenditures and should be added to the cost basis of the property. They are not deductible as an expense in the year they are paid.

Question 5

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

The answer of Jeffrey,a T.V.news anchor,is concerned about the wrinkles...

Question 6

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

Accepted Answer

Assessments or fees imposed for specific privileges or services, such as tolls and user fees, are not considered taxes and therefore are not deductible as such.

Question 7

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, weight reduction programs are deductible as a medical expense if they are recommended by a physician to treat a specific medical condition. This includes conditions such as hypertension caused by excess weight. However, general weight loss programs that are not medically necessary would not be deductible.

Question 8

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

Accepted Answer

Medical expenses can only be deducted in the year they are paid, not when they are incurred or billed. This includes payments made out of pocket and payments made through insurance or other sources.

Question 9

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

Accepted Answer

The answer of A personal property tax based on the...

Question 10

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 statement is true according to IRS Publication 502, which states that "If you make a capital improvement to your property, the cost of the improvement may be partly or fully deductible, depending on the facts and circumstances. Generally, you must add the cost of the improvement to the basis of your property. However, you may be able to recover some of the cost through depreciation or a deduction when you sell the property."

Question 11

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

The answer of Medical expenses incurred on behalf of children...

Question 12

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

The answer of If a medical expense reimbursement is received...

Question 13

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

According to the IRS, long-term care insurance premiums are considered a medical expense and may be deductible subject to certain limitations. The limit is based on the age of the individual and can be found on the IRS website or in Publication 502.

Question 14

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

Accepted Answer

The answer of Foreign real property taxes and foreign income...

Question 15

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

According to the IRS, medical expenses paid on behalf of a person who would qualify as a dependent but for failing the gross income or joint return test may be deductible as itemized deductions.

Question 16

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

Accepted Answer

All deductible expenses must be classified as either deductions for AGI or deductions from AGI on an individual's tax return. Deductions for AGI, also known as "above the line" deductions, are subtracted from the individual's total income to arrive at their AGI. Deductions from AGI, also known as "below the line" deductions, are subtracted from the individual's AGI to arrive at their taxable income.

Question 17

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

Question 18

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, even if taken to alleviate a medical condition, is generally not tax deductible. However, if Charlie's medical expenses (including the cost of the cruise) exceed a certain percentage of his income, he may be able to deduct them on his taxes.

Question 19

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

Accepted Answer

The definition of medical care includes not only the treatment of illnesses and injuries, but also preventive measures such as routine physical examinations, screenings, vaccines, and wellness programs.

Question 20

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

According to IRS Publication 502, medical expenses paid in advance, such as prepayments for medical care, can be deducted in the year they were paid, even if the care is not received until the following year.

Quiz 14: Itemized Deductions