A) Amanda cannot deduct Federal gift taxes.
B) Amanda can deduct Federal gift taxes for AGI.
C) Amanda can deduct Federal gift taxes paid as an itemized deduction.
D) Amanda must include Federal gift taxes with other miscellaneous itemized deductions.
E) None of these is truE.Federal gift and estate taxes are not deductible.
G) D) and E)
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A) One-half of the social security tax is deductible for AGI.
B) Only the electric bill is deductible for AGI.
C) The self-employment tax is not deductible.
D) The safe deposit fee and the electric bill are deductible for AGI.
E) None of these is truE.The safe deposit fee and electric bill are rental expenses.The employer portion of the self-employment taxes is deductible for AGI.
G) None of the above
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A) The cost of eyeglasses.
B) Payments to a hospital.
C) Transportation for medical purposes.
D) The cost of insurance for long-term care services.
E) All of these are deductible as medical expenses.
G) D) and E)
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The charitable deduc...View Answer
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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.Medical expenses include any payments for the care,prevention,diagnosis,or cure of injury,disease,or bodily function that are not reimbursed by health insurance.
G) A) and B)
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A) The standard deduction is increased for taxpayers who are blind or deaf at year end.
B) A married couple is only entitled to one addition to their standard deduction even if both spouses are both over age 65.
C) Bunching itemized deductions is an illegal method of tax avoidance.
D) Before any applicable phase-out,the deduction for personal and dependency exemptions is $3,900 times the number of exemptions.
E) All of these are truE.For 2013,each exemption is worth $3,900.
G) None of the above
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B) False
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A) Expenses associated with a "hobby" are never deductible.
B) The deductibility of an activity's expenses in excess of revenues depends upon whether the activity is primarily profit-motivated or a hobby as determined by facts and circumstances.
C) Taxpayers engaged in a "hobby" are always presumed to be motivated by profit.
D) The regulations do not provide any guidance for determining whether an activity is profit motivated.
E) All of these are truE.The regulations provide a list of factors for determining whether an activity is profit motivated.The presumption that a hobby is profit motivated depends upon whether the activity generates a profit in three of five consecutive years.
G) A) and D)
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B
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A) the deduction of cash contributions to public charities is limited to 30 percent of AGI.
B) the deduction of capital gain property to private nonoperating foundations is limited to 50 percent of AGI.
C) the deduction of capital gain property to public charities is limited to 20 percent of AGI.
D) the deduction of cash contributions to private nonoperating foundations is limited to 30 percent of AGI.
E) None of these is truE.The deduction of cash contributions to public charities is limited to 50 percent of AGI,the deduction of capital gain property to private nonoperating foundations is limited to 20 percent of AGI,and the deduction of capital gain property to public charities is limited to 30 percent of AGI.
G) A) and B)
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B) False
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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.The new assignment needs to lengthen the existing commute (35 miles) by at least 50 miles.Hence,the distance must be 85 miles.
G) C) and D)
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A) $5,000
B) $4,000
C) $2,000
D) $0
E) None of thesE.The deduction is limited to $4,000 for single taxpayers with modified AGI of $65,000 or less.
G) None of the above
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A) Hector chose not to participate in the employer-sponsored plan of his spouse.
B) Hector's spouse participates in an employer-sponsored plan but Hector is not eligible to participate in this plan.
C) Neither Hector nor his spouse participates in an employer-sponsored plan although both are eligible to participate in a plan.
D) Hector can deduct the health insurance premiums regardless of the insurance status of his spouse.
E) None of these - health insurance premiums can only be deducted as an itemized deduction.
G) B) and E)
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B) False
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A) $2,900
B) $1,000
C) $2,700
D) $4,600
E) None of these
G) A) and C)
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A) $100,000
B) $200,000
C) $150,000
D) $250,000
E) None of these
G) C) and E)
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C
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B) False
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False
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A) Fees for investment advice are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
B) Unreimbursed employee business expenses are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
C) Fees for tax preparation are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
D) Reimbursed employee business expenses are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation unless the employer's reimbursement plan qualifies as an accountable plan.
E) All of these are truE.Employee business expenses reimbursed via an accountable plan are not deducted and the reimbursement is excluded from gross income.
G) C) and E)
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A) Marsha and Jeff can deduct $5,000 for AGI.
B) Marsha and Jeff can deduct $4,000 for AGI.
C) Marsha and Jeff can deduct $2,500 for AGI.
D) Marsha and Jeff can deduct $2,000 for AGI.
E) None - the tuition is not deductiblE.Since they paid Josh's tuition and fees to a qualifying institution and their modified AGI exceeds $130,000 and is less than or equal to $160,000,Marsha and Jeff can deduct the tuition and fees up to $2,000.
G) A) and B)
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A) For purposes of the deduction for educational interest,expenses do not include expenses for room,board and travel.
B) For purposes of the deduction for educational interest,qualified education expenses are those paid for the education of the taxpayer,the taxpayer's spouse,or a taxpayer's dependent.
C) The maximum deduction for interest expense on qualified education loans is $6,000.
D) A penalty paid for prematurely withdrawing a certificate of deposit or similar deposit is deductible as an investment expense.
E) All of these are falsE.Penalties for early withdrawal are deductible for AGI.
G) A) and C)
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