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21) Self-employed individuals may deduct the full self-employment taxes paid as a for AGI deduction. 22) Finance charges on personal credit cards are considered interest and are, therefore, deductible. 23) In general, the deductibility of interest depends on the purpose for which the indebtedness is incurred. 24) Interest expense incurred in the.
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11) Under the MACRS system, automobiles and computers are classified as seven-year property. 12) In computing MACRS depreciation in the year of disposition of personal property used in a trade or business, the half-year convention must be applied to the amounts in the tables if the half-year convention was used in.
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88) Kendal reports the following income and loss: Salary$120,000 Income from activity A36,000 Loss from activity B( 30,000) Loss from activity C( 60,000) Activities A, B, and C are all passive activities, but none are rental properties.  What is the amount of the suspended loss attributable to each activity? 89) During the year, Patricia.
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41) Intangible drilling and development costs (IDCs) may be deducted as an expense or may be capitalized. 42) Joan bought a business machine for $15,000 on January 1, 2012, and later sold the machine for $12,800 when the total allowable depreciation is $8,500. The depreciation actually taken on the tax returns.
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1) Deferred compensation refers to methods of compensating employees based upon their current service where the benefits are deferred until future periods. 2) If an individual is self-employed, business-related expenses are deductions for AGI. 3) Unreimbursed employee business expenses are deductions from AGI. 4) An employer-employee relationship exists where the employer has the.
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81) Charles is a self-employed CPA who maintains a qualifying office in his home. Charles has $110,000 gross income from his practice and incurs $88,000 in salaries, supplies, computer services, etc. Charles's mortgage interest and real estate taxes allocable to the office total $10,000. Other expenses total $14,000 and consist.
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31) A taxpayer is allowed to deduct interest expense incurred on home equity indebtedness limited to the lesser of $100,000 or the home equity (FMV of the residence less the acquisition indebtedness). 32) While points paid to purchase a residence are deductible as interest in the period paid, points associated with.
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93) Hope is a marketing manager at a local company.  Information about her 2013 income and expenses is as follows: Income received Salary $150,000 Taxes withheld from salary: Federal income tax                $30,000 State income tax                         8,000 Social Security tax                      9,300 Medicare tax                               2,175 Interest income from bank 6,000 Dividend income from U.S. stocks 4,000 Short-term capital gain 2,000 Long-term capital gain 3,000 State income tax refund.
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94) Explain under what circumstances meals and lodging en route to a medical facility may be deductible. 95) Explain when the cost of living in an institution other than a hospital may be deductible. 96) Discuss the timing of the allowable medical expense deduction. 97) Patrick and Belinda have a twelve year old.
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109) Richard traveled from New Orleans to New York for both business and vacation. He spent 4 days conducting business and some days vacationing. He incurred the following expenses: Airfare$460 Lodging-per day175 Meals-per day100 Business Entertainment800 What is his miscellaneous itemized deduction (before the floor), assuming Richard is an employee and is not reimbursed, under.
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41) A net operating loss can be carried back three years or carried forward five years. 42) All of the following losses are deductible except A) decline in value of securities. B) total worthlessness of securities. C) sale or exchange of business property. D) destruction of personal use property by fire, storm, or casualty. 43) The.
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92) Parveen is married and files a joint return. He reports the following items of income and loss for the year: Salary$ 135,000 Activity A (passive)13,000 Activity B (nonbusiness rental real estate)              ( 45,000) If Parveen actively participates in the management of Activity B, what is his AGI for the year and.
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95) Determine the net deductible casualty loss on the Schedule A for Alan Michael when his adjusted gross income was $40,000 in 2013 and the following occurred:  Adj. FMV  FMVInsurance AssetBasisBeforeAfterReimbursement A$1,200$2,000$ 500$ 100 B14,00012,0005,0001,100 C6003,0002,775125 A and B were destroyed in the same casualty in March. C was destroyed in a separate casualty in.
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71) Steven is a representative for a textbook publishing company. Steven attends a convention which will also be attended by many potential customers. During the week of the convention, Steven incurs the following costs in entertaining potential customers. Meal costs $ 1,500 Entertainment of customers 3,500 Having recently been to a company seminar on the.
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104) What is the treatment of charitable contributions in excess of the applicable limits for the current year? 105) Explain how tax planning may allow a deduction of qualified medical expenses. 106) Explain what types of tax planning are available for taxpayers making charitable contributions. 107) Jill is considering making a donation to.
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98) Harley, a single individual, provided you with the following information for this year: Income: Salary from part-time employment $ 16,000 Interest income from savings 1,000 Net long-term capital gain from investment property 3,000 Deductions: Net business loss (sales of $100,000 less expenses of $130,000) ($30,000) Personal exemption (   3,900) Standard deduction (   6,100) Net-operating loss carryover from last year (   3,000) What is the.
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121) When are home-office expenses deductible? 122) Gina is an instructor at State University in Birmingham. Her university has asked her if she would be interested in taking a temporary assignment at their Montgomery campus. In addition to her salary, the University would pay her living expenses while in Montgomery. What.
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89) During the current year, Deborah Baronne, a single individual, paid the following amounts: Federal income tax$10,000 State income tax$4,000 Real estate taxes on land in France              $1,500 Real estate taxes on land in U.S.              $1,700 State sales taxes$2,000 State occupational license fee              $   600 How much can Deborah deduct in taxes as itemized deductions? 90) Phoebe's AGI.
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41) Van pays the following medical expenses this year: •$1,500 for doctor bills for Van's son who is claimed as a dependent by Van's former spouse. •$300 for Van's eyeglasses. •$900 for Van's dental work. •$3,800 for Van's face lift. Van, a newscaster, is worried about the wrinkles around his eyes. How much can Van.
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81) In October 2013, Jonathon Remodeling Co., an accrual-method taxpayer, remodels and renovates an office building for Dale and bills him $30,000. Dale signs a note for the debt. Dale keeps delaying payment and files bankruptcy in 2014. Creditors are informed that no assets are available for payment.  Jonathon Remodeling.
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21) Under the MACRS system, the same convention that applies in the year of acquisition (e.g., half-year, mid-quarter, or mid-month) also applies in the year of disposition. 22) Residential rental property is defined as property from which more than 80% of the gross rental income is rental income from dwelling units. 23).
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113) Ellie, a CPA, incurred the following deductible education expenses to maintain or improve her skills: Travel and transportation$1,700 Tuition6,000 Books800 Ellie's AGI for the year is $60,000. a.If Ellie is self-employed, what are the amount of and the nature of the deduction for these expenses? b.If, instead, Ellie is an employee who is not reimbursed.
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51) Terra Corporation, a calendar-year taxpayer, purchases and places into service machinery with a 7-year life that cost $518,000. The mid-quarter convention does not apply, and the property is not eligible for bonus depreciation. Terra elects to depreciate the maximum under Sec. 179. Terra's taxable income for the year before.
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1) For individuals, all deductible expenses must be classified as deductions for AGI or deductions from AGI. 2) In 2013, medical expenses are deductible as a from AGI deduction to the extent that they exceed 7.5 percent of the taxpayer's AGI. 3) Medical expenses paid on behalf of an individual who could.
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11) Capital expenditures for medical care which permanently improve or better the taxpayer's property are deductible to the extent the cost exceeds the increase in fair market value to the property attributable to the capital expenditure. 12) Expenditures incurred in removing structural barriers in the home of a physically handicapped individual.
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116) Tia is a 52-year-old an unmarried taxpayer who is an active participant in an employer-sponsored qualified retirement plan. Before IRA contributions, her AGI is $63,000 in 2013. a.What is the maximum amount she can contribute and the maximum deduction she can receive for a contribution to a traditional IRA? b.What.
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21) Material participation by a taxpayer in a passive activity is satisfied if the individual participates in the activity for more than 500 hours during the year. 22) For purposes of the application of the passive loss limitations, a closely-held C corporation is a C corporation where more than 50 percent.
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31) When personal-use property is covered by insurance, no deduction is available for a casualty loss of the property unless the taxpayer timely files an insurance claim for the loss. 32) When the taxpayer anticipates a full recovery on a casualty loss of personal-use property but receives less than full recovery.
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41) In-home office expenses which are not deductible in the year in which the costs were incurred due to limitations may be carried forward to subsequent years. 42) An employer receives an immediate tax deduction for pension and profit-sharing contributions made on behalf of employees. 43) In a defined contribution pension plan,.
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