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Exam 6: Individual Deductions

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Question 31

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For married taxpayers filing separate, excess business losses are defined as aggregate business deductions over the sum of aggregate business gross income or gain of the taxpayer plus $250,000.

A) True
B) False

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Question 32

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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. Calculate their taxable income.

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$82,600 = $110,000 - ($16,640 mortgage i...

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Question 33

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Which of the following is a true statement?

Chuck has AGI of $70,000 and has made the following payments Calculate the amount of taxes that Chuck can include with his itemized deductions.

Taxpayers are allowed to deduct mortgage interest on up to $1,000,000 of acquisition debt for their qualified residence for acquisition debt incurred after December 15, 2017.

Opal fell on the ice and injured her hip this winter. As a result she paid $3,000 for a visit to the hospital emergency room and $750 for follow-up visits with her doctor. While she recuperated, Opal paid $500 for prescription medicine and $600 to a therapist for rehabilitation. Insurance reimbursed Opal $1,200 for these expenses. What is the amount of Opal's qualifying medical expense?

All business expense deductions are claimed as "below the line" deductions.

The deduction for investment interest in excess of the net investment income carries forward to the subsequent year.

Frieda is 67 years old and deaf. If Frieda files as a head of household, what amount of standard deduction can she claim in 2018?

Unreimbursed employee business expenses and hobby expenses are not deductible.

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?

This year Tiffanie files as a single taxpayer. Tiffanie received $62,700 of salary and paid $3,200 of qualified educational interest. This year Tiffanie paid moving expenses of $5,000 and received $9,800 of alimony (from her ex-husband, divorced in 2012). What is Tiffanie's AGI?

Campbell, a single taxpayer, has $400,000 of profits from her general store that she operates as a sole proprietorship. She has no employees, $40,000 of qualified property, and $500,000 of taxable income before the deduction for qualified business income. How much is Campbell's deduction for qualified business income?

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

Detmer is a successful doctor who earned $204,800 in fees this year, but he also competes in weekend golf tournaments. Detmer reported the following expenses associated with competing in almost a dozen tournaments: This year Detmer won $5,200 from competing in various golf tournaments. Assuming that Detmer itemizes his deductions and that he did not have any other miscellaneous itemized deductions, what amount of the golfing expenses are deductible after considering all limitations if the tournament golfing is treated as a hobby activity?

Rachel is an engineer who practices as a sole proprietor. This year, Rachel had net business income of $400,000 from her business. Assume that Rachel pays $150,000 wages to her employees, she has $20,000 of property (unadjusted basis of equipment she purchased last year), has no capital gains, and her taxable income before the deduction for qualified business income is $380,000. Calculate Rachel's deduction for qualified business income.

Ned is a head of household with a dependent son, Todd, who is a full-time student. This year Ned made the following expenditures related to Todd's support: What amount can Ned include in his itemized deductions?

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?

Which of the following is a true statement?

Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for AGI) because: