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Exam 6: Individual Deductions

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Question 31

Multiple Choice

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Which of the following is a true statement?

A) For purposes of the deduction for educational interest, an educational loan must be used to pay tuition to any type of school
B) The maximum deduction for educational interest is $5,000 for married taxpayers filing jointly
C) Self-employed taxpayers are not allowed to deduct health care premiums if the taxpayer is eligible to participate in their spouse's employer-provided health plan
D) Self-employment taxes paid by self-employed taxpayers are deductible as business expenses
E) All of these choices are correct.

F) B) and E)
G) None of the above

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Question 32

Multiple Choice

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Madeoff donated stock (capital gain property) to a public charity. He purchased the stock three years ago for $100,000, and on the date of the gift, it had a fair market value of $200,000. What is his maximum charitable contribution deduction for the year related to this stock if his AGI is $500,000?

A) $100,000
B) $200,000
C) $150,000
D) $250,000
E) None of the choices are correct.

F) C) and E)
G) A) and C)

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Question 33

True/False

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Taxpayers filing single and taxpayers filing married separate have the same basic standard deduction amount.

Jon and Holly are married and live in a retirement community. This year Jon celebrated his 65th birthday and Holly turned 68 years old. For their ages, both Jon and Holly are in good health. What is the amount of their standard deduction this year?

Which of the following is a true statement?

For married taxpayers filing separately, excess business losses are defined as aggregate business deductions over the sum of aggregate business gross income or gain of the taxpayer plus $259,000.

Jenna (age 50)files single and reports AGI of $40,000. This year she has incurred the following medical expenses: Calculate the amount of medical expenses that will be included with Jenna's other itemized deductions.

Chuck has AGI of $70,700 and has made the following payments: Calculate the amount of taxes that Chuck can include with his itemized deductions.

Andres and Lakeisha are married and file jointly. Andres is 72 years old and in good health. Lakeisha is 62 years old and blind. What amount of standard deduction can Andres and Lakeisha claim in 2020?

Kaylee is a self-employed investment counselor who also owns a rental property. This year, she collected $85,000 in fees and paid the following expenses: Kaylee files single. Calculate her adjusted gross income.

This year Norma, a single taxpayer, paid $11,200 of real estate taxes on her personal residence and $9,500 of state income taxes. Which of the following is true?

When taxpayers donate cash and capital gain property to a public charity, the AGI percentage limitation is applied in the following order in 2020:

In 2020, Latrell made the following charitable contributions: Determine the maximum amount of Latrell's charitable deduction assuming the Jones Foundation is a private nonoperating foundation and Latrell's AGI is $100,000 this year. You may assume that the stock and painting have been owned for 10 years.

Frieda is 67 years old and deaf. If Frieda files as a head of household, what amount of standard deduction can she claim in 2020? Use Exhibit 6-12. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

An individual who forfeits a penalty for prematurely withdrawing a certificate of deposit (CD)is allowed to net the penalty against the interest income from the CD, reducing the amount of gross income reported.

Alexandra operates a garage as a sole proprietorship. Alexandra also owns a half interest in a partnership that operates a gas station. This year Alexandra paid or reported the following expenses related to her garage and other property. Determine Alexandra's AGI for 2020.

Which of the following is a true statement?

In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.

Claire donated 230 publicly traded shares of stock (held for five years)to her father's nonoperating private foundation this year. The stock was worth $15,160 but Claire's basis was only $4,160. Determine the maximum amount of charitable deduction for the donation if Claire's AGI is $61,600 this year.

Excess business losses are carried back and then forward.