FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 10: Individuals: Income, deductions, and Credits

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

Essay

Review LaterAdd Note

Review Later

Diane contributed a parcel of land to the United Way.In addition,she contributed bibles and song books from her proprietorship's book store inventory to First Church,a qualified charitable organization.Should Diane's charitable contribution deduction for these contributions be determined by the basis or fair market value of the contributed items?

Correct Answer

verified

The land is a capital asset.Diane's dedu...

View Answer

Show Answer

Question 22

Multiple Choice

Review LaterAdd Note

Review Later

Which of the following statements concerning the credit for child and dependent care expenses is not correct?

A) A taxpayer is not allowed both an exclusion from income and the credit for child and dependent care expenses on the same amount.
B) A taxpayer is not allowed both a deduction as a medical expense and the credit for child and dependent care expenses on the same amount.
C) If a taxpayer's adjusted gross income exceeds $43,000,the rate for the credit for child and dependent care expenses is 20%.
D) If a taxpayer's adjusted gross income exceeds $15,000 but is not over $17,000,the rate for the credit for child and dependent care expenses is 35%.
E) All of the above are correct.

F) A) and B)
G) B) and C)

Correct Answer

verified

Show Answer

Question 23

True/False

Review LaterAdd Note

Betty received a graduate teaching assistantship that was awarded on the basis of academic achievement.The payments must be included in her gross income.

Which of the following statements is true regarding the education tax credits?

Sadie mailed a check for $2,200 to a qualified charitable organization on December 31,2015.The $2,200 contribution is deductible on Sadie's 2015 tax return.

Leona borrows $100,000 from First National Bank and uses the proceeds to purchase City of Houston bonds.The interest Leona pays on this loan is deductible as investment interest subject to the investment interest limits.

The education tax credits (i.e. ,the American Opportunity credit and the lifetime learning credit)are available to help defray the cost of higher education regardless of the income level of the taxpayer.

After the divorce,Jeff was required to pay $18,000 per year to his former spouse,Darlene,who had custody of their child.Jeff's payments will be reduced to $12,000 per year in the event the child dies or reaches age 21.During the year,Jeff paid the $18,000 required under the divorce agreement.Darlene must include the $12,000 in gross income.

During 2015,Kathy,who is self-employed,paid $650 per month for an HSA contract that provides medical insurance coverage with a $3,000 deductible.The plan covers Kathy,her husband,and their three children.Of the $650 monthly fee,$300 was for the high-deductible policy,and $350 was deposited into an HSA.How much of the amount paid for the high-deductible policy can Kathy deduct as a deduction for AGI?

Under the terms of a divorce agreement,Ron is to pay his former wife Jill $10,000 per month.The payments are to be reduced to $7,000 per month when their 15 year-old child reaches age 18.During the current year,Ron paid $120,000 under the agreement.Assuming all of the other conditions for alimony are satisfied,Ron can deduct from gross income (and Jill must include in gross income) as alimony:

Dabney and Nancy are married,both gainfully employed,and have two children who are 3 and 6 years old.Dabney's salary is $35,000 while Nancy's salary is $40,000.During the year,they spend $7,000 for child care expenses that are required so both of them can work outside of the home.Calculate the credit for child and dependent care expenses.

Matt,a calendar year taxpayer,pays $11,000 in medical expenses in 2015.He expects $5,000 of these expenses to be reimbursed by an insurance company in 2016.In determining his medical expense deduction for 2015,Matt must reduce his 2015 medical expenses by the amount of the reimbursement he expects in 2016.

Agnes receives a $5,000 scholarship which covers her tuition at Parochial High School.She may not exclude the $5,000 because the exclusion applies only to scholarships to attend college.

In 2015,Boris pays a $3,800 premium for high-deductible medical insurance for himself and his family.In addition,he contributes $3,400 to a Health Savings Account.Which of the following statements is true?

A taxpayer may qualify for the credit for child and dependent care expenses if the taxpayer's dependent is under age 17.

The taxpayer is a Ph.D.student in accounting at City University.The student is paid $1,500 per month for teaching two classes.The total amount received for the year is $13,500.

Tom,whose MAGI is $40,000,paid $3,500 of interest on a qualified student loan in 2015.Tom is single.He may deduct the $3,500 interest as an itemized deduction.

As an executive of Cherry,Inc. ,Ollie receives a fringe benefit in the form of annual tuition scholarships of $10,000 to each of his three children.The scholarships are paid by the company on behalf of the children of key employees directly to each child's educational institution and are payable only if the student maintains a B average.

Olaf was injured in an automobile accident and received $25,000 for his physical injury,$50,000 for his loss of income,and $10,000 punitive damages.As a result of the award,the amount Olaf must include in gross income is:

The maximum credit for child and dependent care expenses is $2,100 if only one spouse is employed and the other spouse is a full-time student.