Deck 6: Individual Deductions

Question 1

To deduct a moving expense, the taxpayer must be employed or self employed for a specific amount of time after the move.

Answer 1

True

Question 2

An individual who forfeits a penalty for prematurely withdrawing a certificate of deposit (CD) is allowed to net the penalty against the interest income from the CD.

Answer 2

False

Question 3

Deductible medical expenses include payments to medical care providers such as doctors, dentists, and nurses and medical care facilities such as hospitals.

Answer 3

True

Question 4

The phrase "ordinary and necessary" means that an expense must be appropriate and helpful for generating a profit.

Question 5

All reasonable moving expenses are deductible if the move is a minimum of 35 miles in distance.

Question 6

In 2013, taxpayers may elect to deduct state and local sales taxes instead of deducting state and local income taxes.

Question 7

Self employed taxpayers can deduct the cost of health insurance as long as they do not actually participate in their spouses' employer-provided health plan.

Question 8

Taxpayers are allowed to deduct mortgage interest on up to $1,000,000 of acquisition debt for their qualified residence and on up to $500,000 of home-equity debt.

Question 9

Taxpayers traveling for the primary purpose of receiving essential and deductible medical care may deduct the cost of travel.

Question 10

The medical expense deduction is designed to provide relief for doctors and medical practitioners.

Question 11

All business expense deductions are claimed above the line.

Question 12

The itemized deduction for taxes includes all types of state, local, and foreign taxes.

Question 13

All investment expenses are itemized deductions.

Question 14

The profit motive distinguishes "business" activities from "personal" activities.

Question 15

Rental or royalty expenses are deductible "for" AGI.

Question 16

To be deductible, business expenses must be directly related to a business activity.

Question 17

The deduction for medical expenses is limited to the amount of unreimbursed qualifying medical expenses paid during the year reduced by five percent of the taxpayer's AGI.

Question 18

Qualified education expenses for purposes of the deduction of interest on educational loans are expenses paid for the education of the taxpayer, the taxpayer's spouse, or a taxpayer's dependent to attend a post-secondary institution of higher education.

Question 19

The definition of qualifying expenses is more restrictive for the qualified educational expense deduction than it is for the education loan interest expense deduction.

Question 20

Self employed taxpayers can choose between claiming a deduction or a credit for the employer portion of self employment taxes paid.

Question 21

Which of the following is a true statement?

A) For purposes of the deduction for educational interest, expenses do not include expenses for room, board and travel.
B) For purposes of the deduction for educational interest, qualified education expenses are those paid for the education of the taxpayer, the taxpayer's spouse, or a taxpayer's dependent.
C) The maximum deduction for interest expense on qualified education loans is $6,000.
D) A penalty paid for prematurely withdrawing a certificate of deposit or similar deposit is deductible as an investment expense.
E) All of these are false.

Question 22

Which of the following is a true statement?

A) Individuals qualify for the moving expense deduction only if they change employers.
B) To satisfy the distance test, the distance from the taxpayer's old residence to the new place of work must be at least 50 miles more than the distance from the old residence to the old place of work.
C) To satisfy the business test, the taxpayer must be employed full-time for 45 of the first 52 weeks after the move.
D) The moving expense deduction is restricted to expenses associated with moving personal possessions to the new residence.
E) All of these are true.

Question 23

To qualify as a charitable deduction the donation must be made by cash or by check.

Question 24

Which of the following is a true statement?

A) Unreimbursed employee business expenses are deductible as miscellaneous itemized deductions.
B) With one exception, investment expenses are deductible as itemized deductions.
C) Business deductions are one of the most common deductions for AGI but they are not readily visible on the front of Form 1040.
D) The distinction between business and investment activities is critical for determining whether a deduction is claimed above the line (for AGI) or below the line (itemized).
E) All of these are true

Question 25

An individual who is eligible to be claimed as a dependent on another's return and has $1,000 of earned income may claim a standard deduction of $1,350.

Question 26

Taxpayers generally deduct the lesser of their standard deduction or their itemized deductions.

Question 27

Taxpayers filing single and taxpayers filing married separate have the same basic standard deduction amount.

Question 28

In 2014, personal and dependency exemptions are $6,200 for single taxpayers.

Question 29

Unreimbursed employee business expenses, investment expenses, hobby expenses, and certain other expenses are classified as miscellaneous itemized deductions and are deductible only to the extent that their sum exceeds 2% of the taxpayer's AGI.

Question 30

The deduction for charitable contributions is limited to ten percent of the taxpayer's AGI whereas casualty losses on personal assets are only deductible to the extent the losses exceed ten percent of the taxpayer's AGI.

Question 31

Which of the following is a true statement?

A) The deduction for interest on educational loans is subject to a phase-out limitation.
B) The deduction for moving expenses is subject to a phase-out limitation.
C) Self-employed taxpayers are allowed to deduct health care premiums even if the taxpayer is eligible to participate in an employer-provided health plan.
D) Taxpayers are not allowed to receive a moving allowance from their employers.
E) All of these are false.

Question 32

Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for AGI) because:

A) employers are allowed to deduct social security (FICA) taxes as a business expense.
B) self-employed taxpayers need an alternate mechanism for reducing the cost of health care.
C) this deduction provides a measure of equity between employees and the self-employed.
D) health insurance premiums cannot be deducted otherwise.
E) None of these

Question 33

In general, taxpayers are allowed to deduct the fair market value of capital gain property on the date of the donation to a qualified charitable organization.

Question 34

Which of the following is a true statement?

A) All business expenses are deducted for AGI.
B) Investment expenses are typically deducted for AGI.
C) Tax preparation fees are deducted for AGI.
D) Rental and royalty expenses are deducted for AGI.
E) All of these

Question 35

Which of the following is a true statement?

A) For purposes of the deduction for educational interest, an educational loan must be used to pay tuition to any type of school.
B) The maximum deduction for educational interest is $5,000 for married taxpayers filing jointly.
C) Self-employed taxpayers are not allowed to deduct health care premiums if the taxpayer is eligible to participate in their spouse's employer-provided health plan.
D) Self-employment taxes paid by self-employed taxpayers are deductible as business expenses.
E) All of these are true.

Question 36

This year, Jong paid $3,000 of interest on a qualified education loan. Jong files married joint and reports modified AGI of $142,000. What is Jong's deduction for interest expense on an educational loan?

A) $2,500
B) $3,000
C) $1,500
D) $1,000
E) None of these.

Question 37

Which of the following is a true statement?

A) Congress allows self-employed taxpayers to deduct the employer portion of their self-employment tax.
B) To deduct expenses associated with any profit motivated activity taxpayers must maintain a high level of involvement or effort in the activity throughout the year.
C) Business activities never require a relatively high level of involvement or effort from the taxpayer.
D) All business expenses are deducted for AGI.
E) All of these are true.

Question 38

The deduction for investment interest in excess of the net investment income carries forward to the subsequent year.

Question 39

Taxpayers are allowed to deduct all ordinary and necessary expenses incurred in connection with determining their tax obligations imposed by federal authorities.

Question 40

Bunching itemized deductions is one form of tax evasion.

Question 41

Lewis is an unmarried law student at State University, a qualified educational institution. Last year Lewis borrowed $30,000 and used the proceeds to pay his university tuition. This year Lewis paid $1,500 of interest on the loan. Which of the following is a true statement if Lewis reports $40,000 of salary and no other items of income or expense?

A) Lewis can deduct all the interest on his student loan for AGI.
B) Lewis can deduct all the interest on his student loan as an itemized deduction.
C) Lewis can only deduct $1,000 of the interest on his student loan for AGI.
D) Lewis can only deduct $1,000 of the interest on his student loan as an itemized deduction.
E) All of these are false.

Question 42

Casey currently commutes 35 miles to work in the city. He is considering a new assignment in the suburbs on the other side of the city that would increase his commute considerably. He would like to accept the assignment, but he thinks it might require that he move to the other side of the city. Which of the following is a true statement?

A) Casey can deduct moving expenses if the distance between his current residence and his new assignment is at least 50 miles.
B) If Casey's move qualifies for the moving expense deduction, he can deduct the cost of meals while en route to his new residence.
C) To qualify for a moving expense deduction the new commute from Casey's current residence would need to be a minimum of 85 miles.
D) If Casey's move qualifies for the moving expense deduction, he can deduct half the cost of meals while en route to his new residence.
E) All of these are false.

Question 43

Which of the following is a true statement?

A) A taxpayer can deduct medical expenses incurred for members of his family who are dependents.
B) A taxpayer can deduct medical expenses incurred for a qualified relative even if the relative does not meet the gross income test.
C) A divorced taxpayer can deduct medical expenses incurred for a child even if the child is claimed as a dependent by the former spouse.
D) Deductible medical expenses include long-term care services for disabled spouses and dependents.
E) All of these are true.

Question 44

Han is a self-employed carpenter and his wife, Christine, works full-time as a grade school teacher. Han paid $525 for carpentry tools and supplies, and Christine paid $3,600 as her share of health insurance premiums for Han and herself in a qualified plan provided by the school district (not through an exchange). Which of the following is a true statement?

A) The tools and supplies are deductible for AGI while the health insurance is an itemized deduction.
B) Both expenditures are deductible for AGI.
C) The tools and supplies are an itemized deduction but the health insurance is deductible for AGI.
D) Both expenditures are itemized deductions.
E) Neither of the expenditures is deductible.

Question 45

Which of the following costs are NOT deductible as an itemized medical expense?

A) The cost of eyeglasses.
B) Payments to a hospital.
C) Transportation for medical purposes.
D) The cost of insurance for long-term care services.
E) All of these are deductible as medical expenses.

Question 46

This fall, Josh paid $5,000 for his tuition and fees at State University (a qualified education institution). Assume that Josh is Marsha and Jeff's son and that Marsha and Jeff claim Josh as a dependent. Marsha and Jeff's modified AGI is $100,000. How much of Josh's $5,000 tuition and fees payments can Marsha and Jeff deduct this year (assume the 2013 rules apply for purposes of the qualified education expense deduction)?

A) Marsha and Jeff can deduct $5,000 for AGI.
B) Marsha and Jeff can deduct $4,000 for AGI.
C) Marsha and Jeff can deduct $2,500 for AGI.
D) Marsha and Jeff can deduct $2,000 for AGI.
E) None - the tuition is not deductible by Marsha and Jeff.

Question 47

This fall Millie finally repaid her student loan. She originally borrowed the money to pay tuition several years ago when she attended at State University (a qualified educational institution). This year Millie paid a total of $2,400 of interest on the loan. If Millie files single and reports $70,000 of income and no other items of income or expense how much of the interest can she deduct?

A) Millie can deduct $2,400 for AGI.
B) Millie can deduct $1,600 for AGI.
C) Millie can deduct $2,400 as an itemized deduction.
D) Millie can deduct $800 for AGI.
E) None - the tuition is not deductible.

Question 48

This fall Manfred enrolled in the law school at State University (a qualified educational institution) and paid $6,200 in tuition. Until his enrollment Manfred worked as a stock broker and this year he reports $70,000 in wages. If Manfred files single and reports no other items of income or expense how much of the tuition can he deduct as a business expense?

A) Manfred can deduct half of his tuition for AGI.
B) Manfred can deduct half of his tuition as a miscellaneous itemized deduction.
C) Manfred can deduct $6,200 for AGI.
D) Manfred can deduct $6,200 as a miscellaneous itemized deduction.
E) None - the tuition is not deductible as a business expense.

Question 49

This year Riley files single and reports AGI of $71,000. Riley paid $1,200 of interest on a qualified education loan. What amounts can Riley deduct for qualifying education interest?

A) The deduction for qualifying education interest is $1,200.
B) The deduction for qualifying education interest is $1,000.
C) The deduction for qualifying education interest is $720.
D) The deduction for qualifying education interest is $200.
E) None of these.

Question 50

Which of the following expenses can be deducted as moving expenses? 1. The cost of a trip to purchase a new residence
2) The cost of moving personal belongings
3) Lodging (one night) while en route
4) The cost of gasoline when traveling to the new residence
5) One-half of the cost of meals while en route to the new residence

A) Numbers 1, 2, and 4 only.
B) Numbers 1 through 3 only.
C) Numbers 2 through 4 only.
D) Numbers 2 through 5 only.
E) All of these are deductible as moving expenses.

Question 51

Bruce is employed as an executive and his wife, Marie, is a self-employed realtor. Besides Bruce's salary, Bruce and Marie own a warehouse that they rent to a local business for storage. This year they paid $1,250 for electric service in the warehouse. Marie also paid self-employment tax of $6,200 and Bruce had $7,000 of Social Security taxes withheld from his pay. Marie paid $45 fee to rent a safe deposit box to store records associated with her realty operation. Which of the following is a true statement?

A) One-half of the social security tax is deductible for AGI.
B) Only the electric bill is deductible for AGI.
C) The self-employment tax is not deductible.
D) The safe deposit fee and the electric bill are deductible for AGI.
E) None of these is true.

Question 52

Mason paid $4,100 of interest on a loan that paid tuition for him to attend a private university this year. How much of this payment can Mason deduct as interest expense on an educational loan if he files single and reports modified AGI of $90,000?

A) $4,100
B) $4,000
C) $2,667
D) $2,000
E) None of these.

Question 53

Grace is a single medical student at State University, a qualified educational institution. This year Grace paid university tuition of $12,000. Grace works part-time at the University library, and this year she reports $15,000 of salary and no other items of income or expense. Which of the following is a true statement?

A) Grace can deduct all of her tuition for AGI as a business expense.
B) Grace can deduct all of her tuition as a miscellaneous itemized deduction.
C) Grace can only deduct half of her tuition for AGI as a business expense.
D) Grace can only deduct half of her tuition as a miscellaneous itemized deduction.
E) All of these are false.

Question 54

Ned is a head of household with a dependent son, Todd, who is a full-time student. This year Ned made the following expenditures related to Todd's support: $$\begin{array} { l r } \text { Auto insurance premiums } & \$ 1,700 \\\text { Room and board at Todd's school } & 2,200 \\\text { Health insurance premiums (not through an exchange) } & 600 \\\text { Travel (to and from school) } & 350\end{array}$$ What amount can Ned include in his itemized deductions?

A) $1,700 included in Ned's miscellaneous itemized deductions
B) $2,050 included in Ned's miscellaneous itemized deductions
C) $950 included in Ned's miscellaneous itemized deductions
D) $600 included in Ned's medical expenses
E) None of these.

Question 55

Max paid $5,000 of tuition for him to attend a private university this year. How much of this payment can Mason deduct as a qualifying education expense if he files single and reports modified AGI of $60,000 (assume the 2013 rules apply for purposes of the qualified education expense deduction)?

A) $5,000
B) $4,000
C) $2,000
D) $0
E) None of these.

Question 56

Hector is a married self-employed taxpayer, and this year he paid $3,000 for his health insurance premiums (not through an exchange). Under which of the following alternative conditions can Hector deduct the cost of the premiums for AGI?

A) Hector chose not to participate in the employer-sponsored plan of his spouse.
B) Hector's spouse participates in an employer-sponsored plan but Hector is not eligible to participate in this plan.
C) Neither Hector nor his spouse participates in an employer-sponsored plan although both are eligible to participate in a plan.
D) Hector can deduct the health insurance premiums regardless of the insurance status of his spouse.
E) None of these - health insurance premiums can only be deducted as an itemized deduction.

Question 57

Which of the following costs are deductible as an itemized medical expense?

A) The cost of prescription medicine and over-the-counter drugs.
B) Medical expenses incurred to prevent disease.
C) The cost of elective cosmetic surgery.
D) Medical expenses reimbursed by health insurance.
E) None of these costs is deductible.

Question 58

Brice is a single, self-employed electrician who earns $60,000 per year in self-employment income. Brice paid the following expenses this year. Which of the expenses are deductible for AGI? 1. The cost of health insurance (not purchased through an exchange)
2) The employer portion of self-employment tax paid
3) Penalty on early withdrawal of funds from a certificate of deposit

A) Numbers 1 and 2 only.
B) Numbers 1 and 3 only.
C) Numbers 2 and 3 only.
D) None of these is deductible for AGI.
E) All of these are deductible for AGI

Question 59

This fall Marsha and Jeff paid $5,000 for their son Josh's tuition and fees at State University (a qualified education institution). They also paid $1,000 for Josh's books. How much of these two payments can Marsha and Jeff deduct this year, assuming Josh is their dependent, their modified AGI is $135,000, and the 2013 rules apply for purposes of the qualified education expense deduction?

A) Marsha and Jeff can deduct $5,000 for AGI.
B) Marsha and Jeff can deduct $4,000 for AGI.
C) Marsha and Jeff can deduct $2,500 for AGI.
D) Marsha and Jeff can deduct $2,000 for AGI.
E) None - the tuition is not deductible.

Question 60

Jill currently lives in the suburbs and commutes 25 miles to her office in downtown Freeport. She is considering quitting her current job to look for new employment in the downtown area. Which of the following statements best describes how Jill can satisfy the distance test for deducting moving expenses if she accepts a new job in downtown Freeport?

A) Jill must move at least 25 miles further away from downtown Freeport.
B) Jill must move 25 miles east from downtown Freeport.
C) Jill must move 50 miles further away from downtown Freeport.
D) Jill need not move her residence because she is starting a new job.
E) Jill cannot satisfy the distance test if she accepts a job in downtown Freeport.

Question 61

Glenn is an accountant who races stock cars as a hobby. This year Glenn was paid a salary of $80,000 from his employer and won $2,000 in various races. What is the effect of the racing activities on Glenn's taxable income if Glenn has also incurred $4,200 of hobby expenses this year? Assume that Glenn itemizes his deductions but has no other miscellaneous itemized deductions.

A) increase in taxable income of $2,000
B) increase in taxable income of $1,640
C) no change in taxable income
D) decrease in taxable income of $560
E) decrease in taxable income of $2,200

Question 62

Carly donated inventory (ordinary income property) to a church. She purchased the inventory last month for $100,000, and on the date of the gift, it had a fair market value of $92,000. What is her maximum charitable contribution deduction for the year if her AGI is $200,000?

A) $100,000
B) $92,000
C) $60,000
D) $46,000 if the church sells the inventory
E) None of these

Question 63

Which of the following taxes will not qualify as an itemized deduction?

A) personal property taxes assessed on the value of specific property.
B) state, local, and foreign income taxes.
C) real estate taxes on a residence.
D) gasoline taxes on personal travel.
E) None of these qualifies as an itemized deduction.

Question 64

Which of the following is a true statement?

A) A casualty loss can only occur from storm damage.
B) Personal casualty losses can only be deducted to the extent that aggregate casualty losses exceed 10 percent of AGI.
C) Individual casualty losses are only deductible if each individual loss exceeds $5,000.
D) Uninsured thefts of personal assets are not included with casualty losses.
E) All of these are true.

Question 65

Which of the following is a true statement?

A) Taxpayers may only deduct interest on up to $1,500,000 of acquisition indebtedness.
B) Taxpayers may deduct interest on up to $1,000,000 of home-equity debt.
C) The deduction for investment interest expense is not subject to limitation.
D) Interest on home-equity debt up to $100,000 is deductible, even if the loan proceeds are used to buy a new car.
E) None of these is true.

Question 66

Which of the following is a true statement?

A) Expenses associated with a "hobby" are never deductible.
B) The deductibility of an activity's expenses in excess of revenues depends upon whether the activity is primarily profit-motivated or a hobby as determined by facts and circumstances.
C) Taxpayers engaged in a "hobby" are always presumed to be motivated by profit.
D) The regulations do not provide any guidance for determining whether an activity is profit motivated.
E) All of these are true.

Question 67

Which of the following is a true statement?

A) the deduction of cash contributions to public charities is limited to 30 percent of AGI.
B) the deduction of capital gain property to private nonoperating foundations is limited to 50 percent of AGI.
C) the deduction of capital gain property to public charities is limited to 20 percent of AGI.
D) the deduction of cash contributions to private nonoperating foundations is limited to 30 percent of AGI.
E) None of these is true.

Question 68

Madeoff donated stock (capital gain property) to a public charity. He purchased the stock 3 years ago for $100,000, and on the date of the gift, it had a fair market value of $200,000. What is his maximum charitable contribution deduction for the year if his AGI is $500,000 (before considering the itemized deduction phase-out)?

A) $100,000
B) $200,000
C) $150,000
D) $250,000
E) None of these

Question 69

Margaret Lindley paid $15,000 of interest on her $300,000 acquisition debt for her home (fair market value of $500,000), $4,000 of interest on her $30,000 home-equity loan, $1,000 of credit card interest, and $3,000 of margin interest for the purchase of stock. Assume that Margaret Lindley has $10,000 of interest income this year and no investment expenses. How much of the interest expense may she deduct this year?

A) $23,000.
B) $22,000.
C) $19,000.
D) $18,000.
E) None of these.

Question 70

When taxpayers donate cash and capital gain property to a public charity, the AGI percentage limitation is applied in the following order:

A) a 30 percent of AGI limitation is applied to the aggregate donation.
B) a 50 percent of AGI limitation is applied to the cash donation and a 20 percent of AGI limitation is applied to the fair market value of the capital gain donation.
C) a 30 percent of AGI limitation is applied to the cash donation and a 20 percent of AGI limitation is applied to the fair market value of the capital gain donation.
D) a 50 percent of AGI limitation is applied to the cash donation and the fair market value of the capital gain donation is subject to the lesser of a 30 percent of AGI limitation or a 50 percent of AGI limitation after subtracting the cash contributions.
E) donations to public charities are not subject to AGI limitations.

Question 71

This year Norma paid $1,200 of real estate taxes on her personal residence. Norma's other itemized deductions (state income taxes) only amount to $3,100. Which of the following is a true statement if Norma files single with one personal exemption?

A) Norma can deduct 4,300 for AGI.
B) Norma can deduct $1,200 even if her standard deduction is $6,200.
C) Norma should deduct $4,300 even if her standard deduction is $6,200.
D) Norma can deduct $3,100 even if her standard deduction is $6,200.
E) Norma should claim the standard deduction.

Question 72

Which of the following is a true statement?

A) Employees cannot claim business expense deductions.
B) Employees can claim business expense deductions for AGI.
C) Employees can claim business expense deductions as miscellaneous itemized deductions not subject to the 2 percent of AGI limitation.
D) Employees can claim business expense deductions as miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
E) None of these is true.

Question 73

Which of the following is a true statement?

A) Traveling from a personal residence to a place of business is deducted for AGI as a moving expense.
B) Traveling from a personal residence to a place of business is a miscellaneous itemized deduction subject to the 2 percent of AGI limitation.
C) The standard mileage rate can be used to calculate the deduction for traveling from a personal residence to a place of business.
D) Traveling from a personal residence to a place of business is deductible if reimbursed by an employer.
E) Traveling from a personal residence to a place of business is nondeductible.

Question 74

Jim was in an auto accident this year. Jim paid $2,450 to repair his car after the accident and his insurance only reimbursed him $400. Jim bought his car several years ago for $1,500. What is the amount of casualty loss from this accident before Jim applies any casualty loss floor limitations?

A) $2,450
B) $2,050
C) $1,500
D) $1,100
E) None of these is correct.

Question 75

Fred's employer dispatched him on a business trip from the Dallas headquarters to New York this year. During the trip Fred incurred the following expenses: $$\begin{array} { l r } \text { Air fare } & \$ 1,300 \\\text { Lodging } & 750 \\\text { Meals } & 600 \\\text { Cab fare } & 220\end{array}$$ What is the amount of Fred's deduction before the application of any AGI limitations?

A) $2,870
B) $2,570
C) $2,050
D) $1,300
E) $0 - the expenses cannot be deducted unless Fred is reimbursed.

Question 76

Simone donated a landscape painting (tangible capital gain property) to a library, a public charity. She purchased the painting five years ago for $50,000, and on the date of the gift, it had a fair market value of $200,000. What is her maximum charitable contribution deduction for the year if her AGI is $300,000 (before considering the itemized deduction phase-out)?

A) $100,000
B) $200,000
C) $90,000 if the library uses the painting for its charitable purpose
D) $150,000
E) None of these

Question 77

This year Amanda paid $749 in Federal gift taxes on a gratuitous transfer to her nephew. Amanda lives in Texas and does not pay any state or local income taxes. Which of the following is a true statement?

A) Amanda cannot deduct Federal gift taxes.
B) Amanda can deduct Federal gift taxes for AGI.
C) Amanda can deduct Federal gift taxes paid as an itemized deduction.
D) Amanda must include Federal gift taxes with other miscellaneous itemized deductions.
E) None of these is true.

Question 78

Larry recorded the following donations this year: $500 cash to a family in need
$2,400 to a church
$500 cash to a political campaign
To the Salvation Army household items that originally cost $1,200 but are worth $300.
What is Larry's maximum allowable charitable contribution if his AGI is $60,000?

A) $2,900
B) $1,000
C) $2,700
D) $4,600
E) None of these

Question 79

Which of the following is a true statement?

A) Fees for investment advice are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
B) Unreimbursed employee business expenses are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
C) Fees for tax preparation are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation.
D) Reimbursed employee business expenses are included in miscellaneous itemized deductions subject to the 2 percent of AGI limitation unless the employer's reimbursement plan qualifies as an accountable plan.
E) All of these are true.

Question 80

Opal fell on the ice and injured her hip this winter. As a result she paid $3,000 for a visit to the hospital emergency room and $750 for follow-up visits with her doctor. While she recuperated, Opal paid $500 for prescription medicine and $600 to a therapist for rehabilitation. Insurance reimbursed Opal $1,200 for these expenses. What is the amount of Opal's qualifying medical expense?

A) $3,000
B) $3,750
C) $3,650
D) $4,850
E) All of these