Exam 10: Deduction and Losses Certain Itemized Deductions

Judy paid $40 for Girl Scout cookies and $40 for Boy Scout popcorn.Judy may claim an $80 charitable contribution deduction.

A phaseout of certain itemized deductions applies for all taxpayers who choose to itemize their deductions.

Zeke made the following donations to qualified charitable organizations during the year: Basis Fair Market Value Used clothing (all acquired more than a year ago)of taxpayer and his family $ 1,350 $ 375 Stock in ABC,Inc. ,held as an investment for fifteen months 12,000 10,875 Stock in MNO,Inc. ,held as an investment for eleven months 15,000 18,000 Real estate held as an investment for two years 15,000 30,000 ​ The used clothing was donated to the Salvation Army;the other items of property were donated to Eastern State University.Both are qualified charitable organizations.Disregarding percentage limitations,Zeke's charitable contribution deduction for the year is:

Paul,a calendar year married taxpayer,files a joint return for 2016.Information for 2016 includes the following: AGI $175,000 State income taxes 13,500 State sales tax 3,000 Real estate taxes 18,900 Gambling losses (gambling gains were $12,000) 6,800 Paul's allowable itemized deductions for 2016 are:

During the year,Eve (a resident of Billings,Montana)spends three consecutive weeks in Louisville,Kentucky.One week is spent representing the Billings First Christian Church at the national convention,and two weeks are spent vacationing with relatives.One third of Eve's travel expenses will qualify as a charitable deduction.

Interest paid or accrued during the tax year on aggregate acquisition indebtedness of $2 million or less ($1 million or less for married persons filing separate returns)is deductible as qualified residence interest.

In order to dissuade his pastor from resigning and taking a position with a larger church,Michael,an ardent leader of the congregation,gives the pastor a new car.The cost of the car is deductible by Michael as a charitable contribution.

Al contributed a painting to the Metropolitan Art Museum of St.Louis,Missouri.The painting,purchased six years ago,was worth $40,000 when donated,and Al's basis was $25,000.If this painting is immediately sold by the museum and the proceeds are placed in the general fund,Al's charitable contribution deduction is $25,000 (subject to percentage limitations).

Matt,a calendar year taxpayer,pays $11,000 in medical expenses in 2016.He expects $5,000 of these expenses to be reimbursed by an insurance company in 2017.In determining his medical expense deduction for 2016,Matt must reduce his 2016 medical expenses by the amount of the reimbursement he expects in 2017.

Brad,who uses the cash method of accounting,lives in a state that imposes an income tax (including withholding from wages).On April 14,2016,he files his state return for 2015,paying an additional $600 in state income taxes.During 2016,his withholdings for state income tax purposes amount to $3,550.On April 13,2017,he files his state return for 2016 claiming a refund of $800.Brad receives the refund on June 3,2017.If he itemizes deductions,how much may Brad claim as a deduction for state income taxes on his Federal income tax return for calendar year 2016 (filed in April 2017)?

Excess charitable contributions that come under the 30%-of-AGI ceiling are always subject to the 30%-of-AGI ceiling in the carryover year.

Mason,a physically handicapped individual,pays $10,000 this year for the installation of wheelchair ramps,support bars,and railings in his personal residence.These improvements increase the value of his personal residence by $2,000.Only $8,000 of the expenditure qualifies as a medical expense for tax purposes.

During 2016,Nancy paid the following taxes: Tax on residence (for the period from March 1 through August 31,2016) $5,250 State motor vehicle tax (based on the value of the personal use automobile) 430 State sales tax 3,500 State income tax 3,050 ​ Nancy sold her personal residence on June 30,2016,under an agreement in which the real estate taxes were not prorated between the buyer and the seller.What amount qualifies as a deduction from AGI for 2016 for Nancy?

A taxpayer may not deduct the cost of new curbing (relative to a personal residence),even if the construction is required by the city and the curbing provides an incidental benefit to the public welfare.

Georgia contributed $2,000 to a qualifying Health Savings Account in the current year.The entire amount qualifies as an expense deductible for AGI.

In 2016,Brandon,age 72,paid $3,000 for long-term care insurance premiums.He may include the $3,000 in computing his medical expense deduction for the year.

The election to itemize is appropriate when total itemized deductions are less than the standard deduction based on the taxpayer's filing status.

Your friend Scotty informs you that he received a "tax-free" reimbursement in 2016 of some medical expenses he paid in 2015.Which of the following statements best explains why Scotty is not required to report the reimbursement in gross income?

Noah gave $750 to a good friend whose house was destroyed by an earthquake.In addition,Noah contributed his time,valued at $250,in the cleanup effort.Noah may claim a charitable deduction of $1,000 on his tax return for the current year.

Bill paid $2,500 of medical expenses for his daughter,Marie.Marie is married to John and they file a joint return.Bill can include the $2,500 of expenses when calculating his medical expense deduction.