Lecture 6

Which of the following medical costs would be deductible as qualified medical expenses?

Chiropractic services Prescription medications Plastic surgery to reduce scarring after a dog bite Health insurance premiums paid with after tax dollars

Which one of the following medical payments would be deductible for the taxpayer in the current year? Doctor bills paid by the taxpayer for his son who is claimed as a dependent by the taxpayer's ex-wife Doctor bills incurred by the taxpayer and paid with the taxpayer's flexible spending account Doctor bills incurred by the taxpayer in the current year that will be paid next year Doctor bills incurred by the taxpayer, but paid by the taxpayer's health insurance company

Doctor bills paid by the taxpayer for his son who is claimed as a dependent by the taxpayer's ex-wife

T/F Self-employment tax is deductible as an itemized deduction along with real estate taxes and state income tax.

False Rationale: The employer portion of SE tax is deductible FOR AGI.

Which of the following statements is accurate when referring to hobby expenses?

Hobby expenses are NOT deductible, but revenues generated by the hobby are taxable.

Andrew volunteered for the American Red Cross after a recent hurricane. He traveled 200 miles and helped the victims of the disaster in the clean up for five days. He also donated $1,500 to the American Red Cross, but charged the amount of the donation on his credit card. He plans to pay $300 plus interest each month on the credit card charge, so he will pay $900 of the $1,500 charge by the end of the year. What amounts will Andrew be able to deduct for his charitable contributions? (Check all that apply.)

$1,500 charged to the credit card during the year The cost of lodging while he is volunteering Mileage for the 200 miles he drove to the ravaged area

For mortgages obtained in 2019, homeowners may deduct interest on up to $_________of acquisition indebtedness.

$750,000

Which of the following types of interest expense is NOT deductible as an itemized deduction?

-Interest on a qualified home-equity loan used to purchase a car -Interest on credit cards used to purchase -furnishing for a personal residence

Which of the following types of interest expense is NOT deductible as an itemized deduction?

-Interest on credit cards used to purchase furnishing for a personal residence -Interest on a qualified home-equity loan used to purchase a car

Which of the following types of taxes may be deducted from AGI as itemized deductions?

-Real estate taxes on property held for investment -Personal property tax on the value of a boat

Which one of the following types of charitable contributions is deductible for federal income tax purposes?

-Travel costs incurred for charitable purposes -Contributions made with credit cards where the charge is paid in a subsequent year -Contributions made through payroll deduction

There are two types of interest expense that may be deductible as itemized deductions interest on indebtedness secured by a qualified_______and_________ interest.

Residence, investment

When seeking medical treatment, which one of the following travel expenses would NOT be deductible?

The cost of meals if the taxpayer is required to be away from home overnight.

Harli is taking her 6-month-old daughter to the doctor to receive vaccinations. Which of the following statements is correct regarding the deductibility of the vaccinations?

The cost of vaccinations is deductible because it is for the prevention of a disease.

Isabella, age 50, pays $500 each month for health insurance premiums with after-tax dollars. She is not self-employed. During the current year, she also incurred $200 in doctor bills and $50 in over-the-counter medications. Her AGI is $45,000. What amount will she be able to deduct as an itemized deduction after the AGI floor is applied?

[($500 x 12) + $200] = $6,200; $6,200 - ($45,000 x 0.10) = 1,700

Which of the following types of taxes may be deducted from AGI as itemized deductions? pt 2.

pt.2 Personal property tax on the value of a car State and local income taxes Real estate taxes on a primary residence

A qualified trade or business is any trade or business other than a________ _________ trade or business or business of being an ___________

specified service trade employee

The _______ ________ is a flat amount that most individuals can elect to deduct instead of deducting their itemized deductions.

standard deduction

Gary incurred $5,200 in qualified medical expenses last year. His AGI was $50,000. Gary will be able to deduct ________ as an itemized deduction for medical expenses.

$200

Jenny and Jerry have a home with a fair market value of $625,000. They borrowed $400,000 ten years ago to purchase the home (home value at that time was $450,000). They currently owe $250,000 on the acquisition loan. They recently borrowed $110,000 on a home-equity loan. The proceeds were used to purchase a car, take a vacation, and redecorate their home. What is the maximum amount of their indebtedness that can generate deductible interest in the current year?

$250,000

Which one of the following types of charitable contributions is NOT deductible for federal income tax purposes?

-Cash paid to purchase fundraising products where a portion of the proceeds go to fund a charitable cause -Cash contributions are deductible in the year paid, including donations of cash or by check, electronic funds transfers, credit card charges, and payroll deductions.

Which of the following expenses are classified as miscellaneous itemized deductions for 2019?

Casualty and theft losses on property held for investment,Gambling losses,The unrecovered cost of a life annuity when the taxpayer dies

A specified service trade or business for purposes of the Qualified Business Income Deduction includes all of the following EXCEPT : Engineering Consulting Financial Services Health Architecture Law

engineering, architecture

A(n) ______________loss is defined as a loss from a sudden, unexpected, or unusual event such as a fire, storm, or shipwreck that occurs as part of a _________ ______unavailable correct disaster.

federally declared