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Task Base Notes- Regulations > R1 M5 Itemized Deductions > Flashcards

R1 M5 Itemized Deductions Flashcards

1
Q

Mortgage interest of up to $750,000 on the primary and secondary residence is full deductible

A
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2
Q

Point to purchase: Deductible
Point to refinance: Capitalized and amortized

A
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3
Q

What Schedule would you report rental property

A

Rental property are reported on schedule E

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4
Q

Contribution to Roth IRA?

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

A.

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5
Q

Repair cost of $2,000.00 to replace part of the bathroom floor that had rotted due to moisture?

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

A.
Unless the damage is due to a casualty loss (in a federally declared disaster area)

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6
Q

Medical Insurance premium (Louis paid for it) of $1,000 deducted form Louise disability checks

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

B.

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7
Q

Over-the -counter cold remedies $450 used by family?

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

C.

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8
Q

Homeowners Insurance of $540 paid on family home?

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

C.

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9
Q

Life insurance premium of $750.00 for Louis?

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

C.

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10
Q

Alimony payment made by Louis to a former spouse (pre-2019 Divorce agreement)?

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

A

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11
Q

Sales tax of $2,000 paid on the purchase of family car during the year.

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

B

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12
Q

Interest expense of $600 paid on Sandy’s margin balance in her brokerage account (Sandy’s net invest was $1,000.00)

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

B

Investment interest expense is deductible from AGI. The deduction for investment interest expense is limited to net investment income.

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13
Q

Gambling losses of $500 incurred by Sandy over the year. Her gambling winnings were $800.

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

B.

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14
Q

Penalty of $50 for early withdraws from a certificate of deposit.

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

A.

Interest income forfeited as a penalty for early withdrawals from saving account such as certificate of deposit is deducted for AGI.

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15
Q

Student loan interest of $100 on qualified higher education loan used to pay part of Nancy’s college tuition.

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

A.

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16
Q

Interest paid to the IRS for late filing of income tax return

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

C.

Fines and penalties are not deductible

17
Q

Contribution to Roth IRA deductible

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

C.

Contribution to a Roth IRA are not deductible. Note that earnings and distribution from Roth IRA are excluded from gross income.

18
Q

Interest expense of $600 paid on Sandy’s margin balance in her brokerage account (Sandy’s net investment income was $1,000)

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

B.

Investment interest expense is deductible from AGI. The deduction for investment interest expense is limited to net investment income.

19
Q

Gambling losses

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

B.

Gambling losses are deductible from AGI to the extent of gambling winnings.

20
Q

Carlin paid $50 of interest on qualified education loans

A. Deductible for AGI
B. Deductible from AGI ( Itemized deduction from Sch. A)
C. Not deductible

A

A.

Deductible in full as a deduction toward AGI on Form 1040.

Task Base Notes- Regulations (13 decks)

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