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45) This year Norma, a single taxpayer, paid $11,200 of real estate taxes on her personal residence and 9,500 of state income taxes. Which of the following is a true? C) Norma can deduct $10,000 of taxes as an itemized deduction.
46) 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 related to this stock if his AGI is $500,000 (before considering the itemized deduction phaseout)? C) $150,000.
47) When taxpayers donate cash and capital gain property to a public charity, the AGI percentage limitation is applied in the following order: D) a 60 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.
48) 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. Or C) $19,000.
49) Which of the following is a true statement? A) A casualty loss on personal-use assets is generally not deductible.
50) Andres and Lakeisha are married and file joint. Andres is 72 years old and in good health. Lakeisha is 62 years old and blind. What amount of standard deduction can Andres and Lakeisha claim in 2018? A) $26,600.
51) Campbell, a single taxpayer, has $95,000 of profits from her general store that she operates as a sole proprietorship. She has no employees, $40,000 of qualified property, and $50,000 of taxable income before the deduction for qualified business income. How much is Campbell’s deduction for qualified business income? C) $10,000.
52) Campbell, a single taxpayer, has $400,000 of profits from her general store that she operates as a sole proprietorship. She has $100,000 of employee wages, $40,000 of qualified property, and $500,000 of taxable income before the deduction for qualified business income. How much is Campbell’s deduction for qualified business income? C) $50,000.
53) Scott is a self-employed plumber and his wife, Emily, is a full-time employee for the University. Emily has health insurance from a qualified plan provided by the University, but Scott has chosen to purchase his own health insurance rather than participate in Emily’s plan. Besides paying $5,400 for his health insurance premiums, Scott also pays the following expenses associated with his plumbing business: What is the amount of deductions for AGI that Scott can claim this year (2018)? (Not a MC Question) 15500
54) Detmer is a successful doctor who earned $204,800 in fees this year, but he also competes in weekend golftournaments. Detmer reported the following expenses associated with competing in almost a dozen tournaments. Assuming that Detmer itemizes his deductions and that he did not have any other miscellaneous itemized deductions, what amount of the golfing expenses are deductible after considering all limitations if the tournament golfing is treated as a hobby activity? (Not a MC Question) 0
55) Tamra and Jacob are married and they file a joint tax return. Tamra received nearly five times the salary that Jacob received. Which of the following statements is true? C) Tamra and Jacob likely receive a tax marriage benefit.
56) Angelena files as a head of household. In 2018, she reported $52,300 of taxable income, including a $10,000 qualified dividend. What is her gross tax liability, rounded to the nearest whole dollar amount? (Use the tax rate schedules)B) $4,894
57) Allen Green is a single taxpayer with an AGI (and modified AGI) of $210,000, which includes $170,000 of salary, $25,000 of interest income, $10,000 of dividends, and $5,000 of long-term capital gains. What is Allen’s net investment income tax liability this year, rounded to the nearest whole dollar amount? D) $380
58) Which of the following is not one of the general tax credit categories? D) Refundable business.
59) Which of the following statements regarding the child tax credit is false? A) The child for whom the credit is claimed must be under the age of 15 at the end of the year.
60) Rhianna and Jay are married filing jointly in 2018. They have six children under age 17 for whom they may claim the child tax credit. Their AGI was $419,400. What amount of child tax credit may they claim on their 2018 tax return? C) $11,000
61) Which of the following statements regarding the child and dependent care credit is false? B) If a taxpayer’s income is too high, she will be ineligible to claim any child and dependent care credit.
62) Kaelyn’s mother, Judy, looks after Kaelyn’s four-year-old twins so Kaelyn can go to work (she drops off and picks up the twins from Judy’s home every day). Since Judy is a relative, Kaelyn made sure, for tax purposes, to pay her mother the going rate for child care ($6,300 for the year). What is the amount of Kaelyn’s child and dependent care credit if her AGI for the year was $36,000? (Exhibit 8-9) A) $1,440
63) Which of the following is not true of the American opportunity credit? D) A taxpayer may not claim a credit unless the taxpayer pays a dependent’s qualifying educational expenses.
64) Carolyn has an AGI of $38,000 (all from earned income), two qualifying children, and is filing as a head of household. What amount of earned income credit is she entitled to? (Exhibit 8-10) B) $1,643
65) Cassy reports a gross tax liability of $1,000. She also claims $400 of nonrefundable personal credits, $700 of refundable personal credits, and $200 of business credits. What is Cassy’s tax refund or tax liability due after applying the credits? D) $300 refund.
66) Sheryl’s AGI is $250,000. Her current tax liability is $52,068. Last year, her tax liability was $48,722. She will not owe underpayment penalties if her total estimated tax payments are at least which of the following (rounded) amounts (assume she makes the required payments each quarter)? A) $46,861
67) Happy, Sleepy, Grumpy, and Doc all did not make adequate estimated payments. Which of them will not owe underpayment penalties for 2018 given the following information? E) “Happy” and “Doc”.