Paola is a freshman in the UC-Davis degree program in veterinary medicine. In 2009, Paola paid $3,000 in
tuition, $500 for books, and $250 for supplies for class. Paola also paid room and board of $3,500. What is
the total qualifying education expense for education loan interest for Paola in 2009?
Henry graduated from the University of Maryland in 2007. In 2009, to take advantage of lower interest rates, he refinanced his qualified education loans with another loan. He is not a dependent on another person's tax return. What is the maximum deduction available to him for the $3,200 he paid for educational loan interest in 2009?
In 2005 through 2008, Rory borrowed a total of $30,000 for higher education expenses on qualified education loans. In 2009, while still living at home and being claimed by his parents as a dependent, he began making payments on the loan. The first year interest on the loan was reported as $1,750. The amount that Rory can claim on his tax return is:
Charde had a student loan for qualified education expenses on which interest was due. For 2009, the total interest payments were $1,500. Assuming she has AGI under $60,000, how much may she deduct in arriving at adjusted gross income for 2009?
In 2008, Robert, who is single, received his Bachelor's degree and started working. In 2009, he began paying interest on qualified education loans and had modified AGI of $65,000. He paid interest of $1,200 in 2009. Which of the following statements is correct?
A. The full $1,200 is deductible in arriving at adjusted gross income.
B. Taxpayers are not allowed a deduction for education loan interest in 2009.
C. If his modified AGI had been $70,000, the phase-out rules would have reduced his deductible interest tozero.
D. Due to the phase-out rules, only a portion of the $1,200 will be deductible.
For a taxpayer to be eligible to fund a Health Savings Account (HSA), he or she must be:
A. An employee (or spouse) who works for an employer with a high deductible health plan.
B.An employee of a company that offers no health coverage and the employee has purchased a high
deductible health plan on their own.
C. A self-employed individual.
D. a or b or c
If an employer contributes to an employee's HSA, the payment will be:
A. deductible by the employee.
B. not allowed as a contribution on behalf of the employee.
C. not counted as income to the employee.
D. none of the above.
Taxpayers who contribute to or withdraw from an HSA during the year must:
A. attach a written note to their tax return.
B. file a Form 8889 and attach it to their Form 1040.
C. do nothing.
D. report it on Schedule A
At the beginning of 2009, Melissa was permanently transferred from her office in New York City to New
Jersey. Her office in NYC is 15 miles from her old NY home. For Melissa to meet the distance test for qualifying moving expense deductions, how many miles must the office in New Jersey be from her current home?
Which of the following is not deductible as a moving expense?
A. The cost of moving household goods.
B. Travel expenses during the move.
C. The cost of a pre-move house hunting trip.
D. Lodging for household members during the move
Peter, having moved from Oregon to Florida in the current year, met all the requirements to deduct moving expenses. Which of the following expenses that he incurred is not deductible as qualified moving expenses?
A. Home improvements to sell his home in Oregon.
B. Shipping costs for his classic Corvette.
C. Storage costs incurred while his furniture was in transit from Oregon to Florida.
D. The cost of an oil change incurred in driving his other car from Oregon to Florida
For a taxpayer to be eligible to deduct moving expenses, he or she must:
A. Must meet both the time and distance test.
B. Must meet either the time or distance test.
C. Must meet the distance test.
D. Must meet the time test
Rena had the following moving expenses during 2009:
Cost of packing and transporting her household goods $1,500 Lodging for travel between old and new home $600
Meals incurred during the trip $175 Rena moved to start a new job and met all the required tests for moving expense deductibility. What is the total amount of moving expenses that can be deducted on her 2009 return?
A. $2, 275.
For the deduction of self-employment taxes, which of the following statements is correct?
A. They are taken as an itemized deduction on Schedule A.
B. They are not deductible.
C. They are 80% deductible as a for AGI deduction.
D. They are 50% deductible as a for AGI deduction
The determination for the deduction of the self-employment tax is based upon
A. the net earnings of the business.
B. the gross earnings of the business.
C. a total of 7.65% of FICA taxes.
D. the total of itemized deductions
The percentage of self-employed health insurance premiums that is deductible as a for AGI deduction is:
Sharon is a self-employed hair stylist and had net earnings from self-employment of $4,100. She paid $375 per month for health insurance over the last year. Sharon is entitled to a for AGI deduction for health insurance premiums of:
An early withdrawal penalty is reported on Form:
The early withdrawal penalty is deductible as an:
A. itemized deduction on Schedule A.
B. above-the-line deduction for AGI.
C. adjustment on Schedule B.
D. none of the above.
Under a court-ordered decree of separate maintenance executed in 2009, Rebecca is required to pay her exhusband, Carl, $5,000 a month until their youngest son turns age 18. At that time, the required payments
are reduced to $2,500 per month. How much of each payment is deductible by Rebecca as alimony?
All of the following are requirements for a payment to be considered alimony except,
A. Payments cannot be a transfer of services.
B. Payments are not required after the death of the recipient spouse.
C. Payments are required by a divorce or separation agreement.
D. Payments can either be in cash or property
Under a 2009 divorce decree, Antoine is required pay $800 of alimony and $400 of child support each month for the next 10 years. In addition, Antoine makes a voluntary payment of $200 per month. How much of the total monthly payments are deductible by Antoine?
Which of the following items are considered alimony?
A. Payments made to a third party on behalf of the former spouse for the former spouse's dental expenses.
B. Payments made for a six month period after the death of the recipient spouse.
C. Noncash property settlement.
D. Payments made on a piece of property transferred to the ex-spouse under the settlement agreement
Maria files her tax return married filing separately. She has not lived with her husband for over two years. Beginning in January 2009, by court ordered decree, she paid her husband $600 per month as separate maintenance. For 2009, how much will she be able to deduct as alimony?
The goal of the alimony recapture rules is to properly define the substance of payments made to a former spouse in order to ensure proper tax treatment. These rules "lookback" to the following years for calculation:
A. Years 1 and 2.
B. Years 3 and 4.
C. Years 1 through 3.
D. Years 4 through 6.
The educator's expense deduction is taken on:
A. Form 2106.
B. Schedule C.
C. Above the line on the Form 1040.
D. The educator's expense form.
Qualification under the 900-hour working test for the educator's expense deduction is measured by:
A. The calendar year.
B. 3 consecutive months.
C. 5 consecutive months.
D. The academic year
An eligible educator for purposes of the educator's expense deduction is:
A. A teacher.
B. A counselor.
C. A principal.
D. All of the above
In order to be eligible for the qualified tuition and related expense deduction, a qualifying student must be enrolled:
A. For at least one course.
B. At least half time.
C. At least three quarter time.
The deduction for qualified tuition and related expenses includes:
A. Insurance and medical expenses.
B. Only tuition and related expenses.
C. Room and board.
D. Transportation and other personal living expenses
Which of the following may not be deducted as medical expenses? (Disregard any limitations which may apply.)
A. $3,000 to a family physician for medical care.
B. $1,000 long-term care insurance.
C. $600 for eyeglasses.
D. $300 for maternity clothes
During 2009 Shakira paid the following expenses:
Prescrip med $525
Doc and dentist 1,050
Health club membership 450
What is the total amount of medical expenses (before application of the adjusted gross income limitation) that would enter into the calculation of itemized deductions on Shakira's 2009 income tax return?
Mrs. Gonzales must use a wheelchair. Upon advice from her physician, she installed an elevator and widened the front entrance of her house in 2009, incurring $15,000 and $4,000 in costs, respectively. Mrs. Gonzales originally purchased her house for $152,000. An appraisal showed the fair market value of Mrs. Gonzales' house immediately after these modifications at $162,000. Compute her currently deductible medical expense.
Which of the following expenses is not deductible as medical expense?
A. Insulin used for diabetes.
B.Wig, purchased upon the advice of a physician for the mental health of a patient who has lost all of his
her hair from disease.
C. Swimming lessons, recommended by a doctor for improvement of general health.
D. Acupuncture used to treat migraines.
Maria is single and age 32. In 2009, she had AGI of $35,000. During the year, she incurred and paid the following medical costs:
doct and dentist $1,950
Medic care insurance premium 340
Health club fee 600
What is Maria's medical expense deduction (before application of the adjusted gross income limitation) for
her 2009 tax return?
Which of the following costs are deductible on Form 1040, Schedule A, as taxes?
1. Real estate taxes on property owned in Mexico.
2. Property tax portion of vehicle registration, based on the value of the auto.
3. Fine for speeding.
4. Personal property tax on a pleasure boat.
A. 1, 2, and 4.
B. 3 and 4.
C. None of the items are deductible.
D. All of the items are deductible
During 2009, Sam paid the following taxes related to his home:
prop taxes on res 1,550
prop tax on car 400
propr taxes on land held for LT apprec 350
What amount can Sam deduct as property taxes in calculating his itemized deductions for 2009?
Taxes deductible as an itemized deduction include all of the following except:
A. Personal property taxes based on the value of the property.
B. Taxes that the taxpayer paid on property owned by his/her parents or children.
C. State and local income taxes.
D. Real estate taxes based on the assessed value of the property
Cynthia lives in California, a state that imposes a tax on income. The following information relates to Cynthia's state income taxes for 2009:
Tax withheld 2009 $3,000
Refund rec'd 300
Assessment paid in 2009 for 2007 tax 800
Assuming she elects to deduct state and local income taxes, what amount should Cynthia use as an itemized deduction for state and local income taxes for her 2009 federal income tax return?
For investment interest expense in 2009, the deduction by a taxpayer is:
A. Limited to the investment interest paid in 2009.
B. Limited to the taxpayer's net investment income for 2009.
C. Not limited.
D. Limited to the taxpayer's investment income for 2009
For 2009, Jorge, a single father, reported the following amounts relating to his investments:
Net invest income from int $7,000
Int expense on loan 2,000
Int expense on funds borrowed in 2008 to purchase land for invest 6,000
What is the maximum amount that Jorge can deduct in 2009 as investment interest expense?
Which of the following interest expenses incurred by Amanda is treated as personal interest expense and, therefore, not deductible as an itemized deduction?
A. Interest expense on personal credit cards.
B. Bonds purchased with accrued interest.
C. Interest on a home mortgage acquired in 1998.
D. Interest incurred by a partnership in which Amanda is a limited partner
Some contributions may be limited to 50% of the taxpayer's AGI. Deductions to which of the following organizations are subject to the 50% limitation on deductible contributions?
A. Churches and conventions of organizations of churches and educational organizations.
B. Hospitals and certain medical research organizations associated with these hospitals.
C. Rotary, Elks, and Lions Clubs who raise money for public causes.
D. Both a and b.
Which of the following organizations do not qualify for deductible charitable contributions?
A. The Red Cross.
B. A political party.
D. All of the above
For the current year, Sheila Jones had adjusted gross income of $100,000. During the year, she contributed
$6,000 to her church and an additional $3,000 to qualified charities. She also contributed religious artwork with a fair market value of $60,000 and a basis of $20,000 to her church. The church intends to display the religious artwork in the church foyer. If Sheila chooses to itemize her deductions, what is the amount of her deductible charitable contribution?
Using the information in question 40, what is the amount of the charitable contribution carryforward for Sheila Jones?
If one or more non-cash gifts have a fair market value over $500, the taxpayer must:
A. Attach a written explanation to the Form 1040.
B. Complete Schedule D.
C. File Form 8283.
D. Attach a letter from the recipient organization.
Abel's car was completely destroyed in an accident that was his fault. His loss was $8,500 and his policy had a $2,000 deductible. What amount of casualty loss can Abel claim on his return (before deduction limitations)?
In 2009, the Chens' pleasure boat was severely damaged by a hurricane in an area that was declared a federal disaster area. They had AGI of $110,000 in 2009. The following information relates to the craft:
Cost basis $95,000
FMV before 135,000
FMV after 25,000
The Chens had insurance and received an $80,000 insurance settlement. What is the allowable casualty loss deduction for the Chens in 2009?
In 2009, the U.S. President declared a federal disaster due to wild fires in California. Helen lives in the affected area and lost her home in the fires. What choice does she have regarding when she can claim the loss on her tax return?
A. It must be claimed in 2008 if the return has not been filed by the date of the loss.
B. It must be claimed in 2009 if the loss is greater than Helen's modified adjusted gross income.
C. It may be claimed in 2010 if an election is filed with Helen's 2009 return.
D. It may be claimed in either 2008 or 2009
In 2009, Allan's pleasure boat was destroyed by a flood. He had purchased the boat in 2006 for $45,000. On what form(s) will Allan report this loss?
A. Form 4684, Casualties and Thefts, and Schedule A, Itemized Deductions.
B. Form 4684, Casualties and Theft, and Schedule D, Capital Gains and Losses.
C. Form 4797, Sales of Business Property and Involuntary Conversions, and Schedule D, Capital Gains and
D. On the first page of Form 1040.
Which of the following miscellaneous deductions are subject to the 2% of adjusted gross income limitation?
A. Unreimbursed employee business expenses.
B. Investment counsel and advisory fees.
C. Safe deposit box fees.
D. All of the above
Which of the following expenses is deductible, but subject to the 2% limitation on Form 1040, Schedule A, Job Expenses and Most Other Miscellaneous Itemized Deductions?
A. A blue suit for an accountant.
B. Appraisal fees on the sale of a personal residence.
C. Uniforms for a UPS delivery person.
D. The cost of hauling tools to work in the trunk of a car
Which of the following miscellaneous itemized deductions is not subject to the 2% of adjusted gross income limitation?
A. Unreimbursed employee business expenses.
B. Gambling losses up to the amount of gambling winnings.
C. Union or professional dues and subscriptions.
D. Tax return preparation fees
With respect to the limitations of itemized deductions, a taxpayer filing jointly is deemed to be a high income taxpayer if 2009 AGI exceeds: