Deck 6

Question 1

Are auto loans deductible?

Answer 1

Not deductible (consumer loans)

Question 2

Examples of itemized deductions

Answer 2

Personal casualty loss, charitable contributions, unreimbursed business expense of an outside salesperson

Question 3

Keogh plan, define earned income

Answer 3

Net self-employment earnings reduced by the amount of the allowable Keogh deduction and 1/2 the self-employment tax

Question 4

Medical expenses are itemized deductions subject to a _____% AGI floor?

Answer 4

10%

Question 5

Charitable contributions subject to the 50% limit that are not fully deductible in the year made may be:

Answer 5

Carried forward 5 years

Question 6

Moving expenses are what kind of deductions?

Answer 6

Deductions for AGI (not itemized deductions)

Question 7

Example of allowable itemized deduction

Answer 7

real estate tax on personal evidence, Ad valorem tax on personal automobile, Current-year state and city income taxes withheld

Question 8

Contributions of appreciated property are deducted at what value?

Answer 8

FMV

Question 9

A deduction for insurance and utilities costs is not allowed for a:

Answer 9

Personal residence that is not used for rental purposes

Question 10

Rule for deducting medical expenses:

Answer 10

Deductible medical expenses are limited to the amount that exceeds 10% of the taxpayer’s adjusted gross income

Question 11

Examples of deductible moving expenses

Answer 11

cost of moving household goods, transportation, and cost of hotel during drive to new home (not breaking the lease)

Question 12

Additional standard deduction amount for being over the age of 65 or blind?

Answer 12

$1,550

Question 13

IRC Section 221

Answer 13

Allows the deduction of student loan interest (above-the-line for AGI) paid on qualified education loans up to a maximum of $2,500 for the tax year; no limitation on the number of years

Question 14

Miscellaneous itemized deductions

Answer 14

Deductible to the extent that such miscellaneous itemized deductions exceed 2% of AGI

Question 15

Home equity indebtedness

Answer 15

Limited to $100,000 on a joint income tax return, but only $50,000 if married filing separately

Question 16

Net investment income =

Answer 16

Investment income - related investment expenses other than “investment interest expenses”

Question 17

No IRA deduction for the:

Answer 17

1) rich and 2) in a retirement plan

Question 18

Maximum IRA deduction equals the lesser of:

Answer 18

$5,500 or the individual’s compensation