FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 10: Income, Deductions and Credits

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 61

True/False

Review LaterAdd Note

Review Later

A taxpayer may not deduct the cost of new curbing (relative to a personal residence), even if the construction is required by the city and the curbing provides an incidental benefit to the public welfare.

A) True
B) False

Correct Answer

verified

Show Answer

Question 62

True/False

Review LaterAdd Note

Review Later

For purposes of computing the deduction for qualified residence interest, a qualified residence includes the taxpayer's principal residence and two other residences of the taxpayer or spouse.

A) True
B) False

Correct Answer

verified

Show Answer

Question 63

True/False

Review LaterAdd Note

A phaseout of certain itemized deductions applies for all taxpayers who choose to itemize their deductions.

If a scholarship does not satisfy the requirements for a gift, the scholarship must be included in gross income.

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

Brian, a self-employed individual, pays state income tax payments of: ​ $900 on January 17, 2017 (4th estimated tax payment for 2016) $1,000 on April 17, 2017 (1st estimated tax payment in 2017) $1,000 on June 15, 2017 (2nd estimated tax payment in 2017) $1,000 on September 15, 2017 (3rd estimated tax payment in 2017) $800 on January 16, 2018 (4th estimated tax payment of 2017) Brian had a tax overpayment of $500 on his 2016 state income tax return and applied this to his 2017 state income taxes.What is the amount of Brian's state income tax itemized deduction for his 2017 Federal income tax return?

The tax benefit received from a tax credit is never affected by the tax rate of the taxpayer.

Georgia contributed $2,000 to a qualifying Health Savings Account in the current year.The entire amount qualifies as an expense deductible for AGI.

The tax benefits resulting from tax credits and tax deductions are affected by the tax rate bracket of the taxpayer.

Bradley has two college-age children, Clint, a freshman at State University, and Abigail, a junior at Northwest University.Both Clint and Abigail are full-time students.Clint's expenses during the 2017 fall semester are as follows: $2,400 tuition, $250 books and course materials, and $1,600 room and board.Abigail's expenses for the 2017 calendar year are as follows: $10,200 tuition, $1,200 books and course materials, and $3,600 room and board.Tuition and the applicable room and board costs are paid at the beginning of each semester. ​ Bradley is married, files a joint tax return, claims both children as dependents, and reports a combined AGI with his wife Allie of $114,000 for 2017.Determine Bradley's available education tax credit for 2017.

Judy paid $40 for Girl Scout cookies and $40 for Boy Scout popcorn.Judy may claim an $80 charitable contribution deduction.

Dan contributed stock worth $16,000 to his college alma mater, a qualified charity.He acquired the stock 11 months ago for $4,000.He may deduct $16,000 as a charitable contribution deduction (subject to percentage limitations).

For all of the current year, Randy (a calendar year taxpayer) allowed the Salvation Army to use a building he owns rent-free.The building normally rents for $24,000 a year.Randy will be allowed a charitable contribution deduction this year of $24,000.

Trent sells his personal residence to Chester on July 1, 2017.He had paid $7,000 in real property taxes on March 1, 2017, the due date for property taxes for 2017.Trent may not deduct the portion of the taxes he paid for the period the property was owned by Chester.

Contributions to public charities in excess of 50% of AGI may be carried back 3 years or forward for up to 5 years.

Barney is a full-time graduate student at State University.He serves as a teaching assistant for which he is paid $700 per month for 9 months and his $5,000 tuition is waived.The university waives tuition for all of its employees.In addition, he receives a $1,500 research grant to pursue his own research and studies.Barney's gross income from the above is:

Joe, who is in the 33% tax bracket this year, expects to retire next year and be in the 25% tax bracket.He plans to donate $50,000 to his church.Because he will not have the cash available until next year, Joe donates land (long-term capital gain property) with a basis of $10,000 and fair market value of $50,000 to the church in December of the current year.He reacquires the land for $50,000 in February of next year.Discuss Joe's tax objectives and all tax issues related to his actions.

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.

Joseph and Sandra, married taxpayers, took out a mortgage on their home for $350,000 15 years ago.In May of this year, when the home had a fair market value of $450,000 and they owed $250,000 on the mortgage, they took out a home equity loan for $220,000.They used the funds to purchase a single engine airplane to be used for recreational travel purposes.What is the maximum amount of debt on which they can deduct home equity interest?

Capital assets donated to a public charity that would result in long-term capital gain if sold, are subject to the 30%-of-AGI ceiling limitation on charitable contributions for individuals.