FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Individual Deductions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 41

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following is a true statement?

A) Congress allows self-employed taxpayers to deduct the employer portion of their self-employment tax.
B) To deduct expenses associated with any profit motivated activity, taxpayers must maintain a high level of involvement or effort in the activity throughout the year.
C) Business activities never require a relatively high level of involvement or effort from the taxpayer.
D) All business expenses are deducted for AGI.
E) All of the above are truE.See discussion of the self-employment deduction in the text.

F) B) and D)
G) B) and E)

Correct Answer

verified

Show Answer

Question 42

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following is a true statement?

A) The deduction for interest on educational loans is subject to a phase-out limitation.
B) The deduction for moving expenses is subject to a phase-out limitation.
C) Self-employed taxpayers are allowed to deduct health care premiums even if the taxpayer is eligible to participate in an employer-provided health plan.
D) Taxpayers are not allowed to receive a moving allowance from their employers.
E) All of the above are falsE.Self-employed taxpayers are not allowed to deduct health care premiums if they are eligible to participate in an employer-provided health plan.

F) A) and B)
G) A) and D)

Correct Answer

verified

Show Answer

Question 43

Multiple Choice

Review LaterAdd Note

Which of the following is a true statement?

Which of the following is a true statement?

The profit motive distinguishes "business" activities from "personal" activities.

Hector is a married self-employed taxpayer, and this year he paid $3,000 for his health insurance premiums (not through an exchange) . Under which of the following alternative conditions can Hector deduct the cost of the premiums for AGI?

Justin and Georgia file married jointly with one dependent. This year, their AGI is $325,300. What dollar amount of personal and dependency exemptions would they be allowed to deduct this year?

This year Darcy made the following charitable contributions: Determine the maximum amount of charitable deduction for Darcy's contribution of the painting if her AGI is $80,000 this year. You may assume that both the stock and painting have been owned for 10 years and that the painting was used by the State Art Museum consistent with museum's charitable purpose.

Taxpayers traveling for the primary purpose of receiving essential and deductible medical care may deduct the cost of travel.

Which of the following expenses can be deducted as moving expenses? 1) The cost of a trip to purchase a new residence 2) The cost of moving personal belongings 3) Lodging (one night) while en route 4) The cost of gasoline when traveling to the new residence 5) One-half of the cost of meals while en route to the new residence

To be deductible, business expenses must be directly related to a business activity.

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.

To qualify as a charitable deduction the donation must be made by cash or by check.

The medical expense deduction is designed to provide relief for doctors and medical practitioners.

Self-employed taxpayers can choose between claiming a deduction or a credit for the employer portion of self-employment taxes paid.

This fall Marsha and Jeff paid $5,000 for their son Josh's tuition and fees at State University (a qualified education institution) . They also paid $1,000 for Josh's books. How much of these two payments can Marsha and Jeff deduct this year, assuming Josh is their dependent and their modified AGI is $135,000?

Qualified education expenses for purposes of the deduction of interest on educational loans are expenses paid for the education of the taxpayer, the taxpayer's spouse, or a taxpayer's dependent to attend a post-secondary institution of higher education.

Karin and Chad (ages 30 and 31, respectively) are married and together have $110,000 of AGI. This year they have recorded the following expenses: Karin and Chad will file married joint with two personal exemptions. Calculate their taxable income.

The definition of qualifying expenses is more restrictive for the qualified educational expense deduction than it is for the education loan interest expense deduction.

Max paid $5,000 of tuition for him to attend a private university this year. How much of this payment can Mason deduct as a qualifying education expense if he files single and reports modified AGI of $60,000?