FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 8: Deductions: Itemized Deductions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 31

Multiple Choice

Review LaterAdd Note

Review Later

Frank Fox won $10,000 in a state lottery. He also lost $3,000 at the horse races. On his income tax return he should report:

A) $10,000 gross income
B) $7,000 gross income
C) $10,000 gross income and $3,000 deduction for adjusted gross income
D) $10,000 gross income and $3,000 itemized deduction
E) None of the above

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

Correct Answer

verified

Show Answer

Question 32

True/False

Review LaterAdd Note

Review Later

All state and local taxes are deductible for federal income tax purposes.

A) True
B) False

Correct Answer

verified

Show Answer

Question 33

True/False

Review LaterAdd Note

An ad valorem tax is a tax in proportion to the value of personal property.

Non-home-mortgage interest prepaid in cash can only be deducted:

Max Murphey, a cash basis taxpayer, borrowed $10,000 from a bank for a business loan on August 1, to be repaid one year later. fte interest for one year at 6 percent was deducted from the loan proceeds in advance. His interest deduction for the current year is:

Miscellaneous itemized deductions are deductible only:

Itemized deductions only reduce taxable income if the taxpayer's itemized deductions exceed the standard deduction amount.

Private foundations are organizations which do not normally receive donations:

Education expenses which qualify an individual for a new trade or business are allowed as an itemized deduction.

Estate taxes, gift taxes, and state inheritance taxes are deductible for federal income tax purposes.

Individual taxpayers are allowed to deduct unreimbursed medical and dental expenses paid during the year for themselves, their spouse, and dependents.

fte following taxes were paid by the Allens in the current year-real estate taxes on their home, $1,800; state income taxes, $750; city sales tax, $350; and state gasoline tax (personal use of automobile), $30. In itemizing their deductions, what is the maximum amount that the Allens may claim as a deduction for taxes?

Charges, sometimes known as "points," paid by a borrower to a lender are generally deductible as interest over the life of the loan if they are compensation solely for the use or forbearance of money.

Ad valorem personal property taxes are allowed as an itemized deduction.

fte taxpayer may deduct the fair market value of the time spent in rendering services to a qualified charitable organization.

Determine the amount of charitable contribution allowed for the current year assuming Guy Gallworthy has adjusted gross income of $30,000 and gave inventory costing $2,000 but worth $2,500 to a public charity.

An interest deduction is allowable on mortgage payments made by the taxpayer for a sick friend.

Individual taxpayers cannot deduct as itemized deductions losses arising from fire, storm, shipwreck, or other casualty, or from theft of nonbusiness property.

Mark Miller paid the following medical expenses during the year (all in excess of reimbursement) : Assuming the Millers' adjusted gross income was $60,000, how much of a medical expense deduction may the Millers claim on their joint return?

An individual is allowed a medical deduction set at a standard rate of 50 cents per mile for the use of a car for medical purposes in lieu of a deduction based on the actual operating expenses for gas, oil, etc.