Question 1

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 deductible medical expense before considering any AGI limitations?

Accepted Answer

A)   $3,000
B)   $3,750
C)   $3,650
D)   $4,850
E)   All of the aboveF) A) and B)
G) B) and D)

Question 2

Which of the following is a true statement?

Accepted Answer

A)   Traveling from a personal residence to a place of business is deducted for AGI as a moving expense.
B)   Traveling from a personal residence to a place of business is a miscellaneous itemized deduction subject to the 2 percent of AGI limitation.
C)   The standard mileage rate can be used to calculate the deduction for traveling from a personal residence to a place of business.
D)   Traveling from a personal residence to a place of business is deductible if reimbursed by an employer.
E)   Traveling from a personal residence to a place of business is nondeductible.F) A) and B)
G) B) and D)

Question 3

Which of the following is a true statement?

Accepted Answer

A)   Fees for investment advice are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
B)   Unreimbursed employee business expenses are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
C)   Fees for tax preparation are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
D)   Reimbursed employee business expenses are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation unless the employer's reimbursement plan qualifies as an accountable plan.
E)   All of the above are true.F) A) and E)
G) C) and D)

Question 4

When taxpayers donate cash and capital gain property to a public charity, the AGI percentage limitation is applied in the following order:

Accepted Answer

A)   a 30 percent of AGI limitation is applied to the aggregate donation.
B)   a 50 percent of AGI limitation is applied to the cash donation and a 20 percent of AGI limitation is applied to the fair market value of the capital gain donation.
C)   a 30 percent of AGI limitation is applied to the cash donation and a 20 percent of AGI limitation is applied to the fair market value of the capital gain donation.
D)   a 50 percent of AGI limitation is applied to the cash donation and the fair market value of the capital gain donation is subject to the lesser of a 30 percent of AGI limitation or a 50 percent of AGI limitation after subtracting the cash contributions.
E)   donations to public charities are not subject to AGI limitations.F) B) and E)
G) B) and D)

Question 5

Claire donated 200 publicly-traded shares of stock (held for 5 years) to her father's nonoperating private foundation this year. The stock was worth $15,000 but Claire's basis was only $4,000. Determine the maximum amount of charitable deduction for the donation if Claire's AGI is $60,000 this year.

Accepted Answer

$12,000
Explanation: The stock is long-t...

Question 6

Madeoff donated stock (capital gain property)  to a public charity. He purchased the stock 3 years ago for $100,000, and on the date of the gift, it had a fair market value of $200,000. What is his maximum charitable contribution deduction for the year related to this stock if his AGI is $500,000 (before considering the itemized deduction phase-out) ?

Accepted Answer

A)   $100,000
B)   $200,000
C)   $150,000
D)   $250,000
E)   None of the aboveF) A) and E)
G) A) and B)

Question 7

Homer is an executive who is paid a salary of $80,000. Homer also paints landscapes as a hobby. This year Homer expects to sell paintings for a total of $750 and incur the following expenses associated with his painting activities: $$\begin{array} { | l | l | r | r | } 
\hline \text { Donee } & \text { Property } & \text { Cost } & \text { FMV } \
\hline \text { State Univ ersity } & \text { IBM stock } & \$ 15,000 & \$ 10,500 \
\hline \text { Satration Arryy } & \text { clothes } & 2,500 & 500 \
\hline \text { State Art Museum } & \text { painting } & 5,000 & 45,000 \
\hline \text { City Hospital } & \text { cash } & 8,000 & \
\hline
\end{array}$$ What is the effect of Homer's hobby on his taxable income? Assume his AGI does not reflect his painting activities and that he itemizes deductions but has no other miscellaneous itemized deductions.

Accepted Answer

Homer's hobby will increase his taxable ...

Exam 7: Individual From Agi Deductions

Correct Answer
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Homer's hobby will increase his taxable ...
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Correct Answer
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Claire donated 200 publicly-traded shares of stock (held for 5 years) to her father's nonoperating private foundation this year. The stock was worth $15,000 but Claire's basis was only $4,000. Determine the maximum amount of charitable deduction for the donation if Claire's AGI is $60,000 this year.

Correct Answer
verified
$12,000
Explanation: The stock is long-t...
View Answer

Which of the following is a true statement?

Correct Answer
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Which of the following is a true statement?

Correct Answer
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Correct Answer
verified

When taxpayers donate cash and capital gain property to a public charity, the AGI percentage limitation is applied in the following order:

Correct Answer
verified

Exam 7: Individual From Agi Deductions

Correct AnswerverifiedHomer's hobby will increase his taxable ...View AnswerShow Answer

Correct AnswerverifiedShow Answer

Correct Answerverified$12,000Explanation: The stock is long-t...View AnswerShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

Which of the following is a true statement?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

When taxpayers donate cash and capital gain property to a public charity, the AGI percentage limitation is applied in the following order:

Correct AnswerverifiedShow Answer

Correct Answer
verified
Homer's hobby will increase his taxable ...
View Answer

Correct Answer
verified

Correct Answer
verified
$12,000
Explanation: The stock is long-t...
View Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified