FiltersDone

Question type

Essay

Multiple Choice

Short Answer

True False

Matching

Exam 6: Individual for Agi Deductions

Show Answer

Share

---

All types

Filters

Study FlashcardsPractice ExamLearn

Question 21

True/False

Review LaterAdd Note

Review Later

Taxpayers who use a home for both personal and rental use generally must allocate expenses associated with the home to the personal use and the rental use.

A) True
B) False

Correct Answer

verified

Show Answer

Question 22

True/False

Review LaterAdd Note

Review Later

A self-employed taxpayer reports home office expenses as for AGI deductions while home office expenses for employees are nondeductible.

A) True
B) False

Correct Answer

verified

Show Answer

Question 23

Multiple Choice

Review LaterAdd Note

Hector is a married self-employed taxpayer,and this year he paid $3,000 for his health insurance premiums.Under which of the following alternative conditions can Hector deduct the cost of the premiums for AGI?

Lisa,age 45,needed some cash so she received a $50,000 distribution from her Roth IRA.At the time of the distribution,the balance in the Roth IRA was $200,000.Lisa established the Roth IRA 10 years ago.Over the years,she has contributed $20,000 to her account.What amount of the distribution is taxable and subject to early distribution penalty?

Which of the following statements regarding Roth IRAs is false?

Cassandra,age 33,has made deductible contributions to her traditional IRA over the years.When the balance in her IRA was $40,000,Cassandra received a distribution of $34,000 from her IRA in order to purchase a new car.How much of the $34,000 distribution will she have remaining after paying income taxes and early distribution penalties on the distribution? Her marginal tax rate is 24 percent.

Katy owns a second home.During 2018,she used the home for 20 personal use days and 50 rental days.Katy allocates expenses associated with the home between rental use and personal use.Katy did not incur any expenses to obtain tenants.Which of the following statements is correct regarding the tax treatment of Katy's income and expenses from the home?

In 2018,Tyson (age 52)earned $50,000 of salary.Assuming he does not participate in an employer-sponsored plan,what is the maximum deductible IRA contribution Tyson can make in 2018?

What is the correct order of the loss limitation rules?

In 2018,Tyson (age 22)earned $3,500 from his part-time job and he reported $15,000 of interest income (unearned income).Assuming he does not participate in an employer-sponsored plan,what is the maximum deductible IRA contribution Tyson can make in 2018?

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?

Ashton owns a condominium near San Diego,California.This year,he incurs the following expenses in connection with his condo: $\begin{array}{l}\begin{array}{lll}\text { Insurance } \\\text { Mortgage interest } \\\text { Property taxes } \\\text { Repairs and maintenance } \\\text { Utilities } \\\text { Depreciation }\end{array}\begin{array}{lll}\$ \quad 1,300 \\8,000 \\2,000 \\900 \\2,200 \\10,000\end{array}\end{array}$ During the year,Ashton rented the condo for 120 days and he received $24,000 of rental receipts.He did not use the condo at all for personal purposes during the year.Ashton is considered to be an active participant in the property.Ashton's AGI from all sources other than the rental property is $120,000.Ashton does not have passive income from any other sources.What is Ashton's AGI?

Compared to the Tax Court method of allocating expenses between rental use and personal use,the IRS method tends to allocate more expenses to personal use than does the Tax Court method.

During 2018,Jacob,a 19-year-old full-time student,earned $4,500 during the year and was not eligible to participate in an employer-sponsored retirement plan.The general limit for deductible contributions during 2018 is $5,500.How much of a tax-deductible contribution can Jacob make to an IRA?

In 2018,Madison is a single taxpayer who is 25 years of age.During 2018,she contributed $3,000 to her employer sponsored 401(k)account.Her 2018 AGI was $67,500 (before considering IRA deductions).What is the maximum deductible contribution,if any,that Madison can make her to IRA?

A passive activity is any activity that involves a trade or business or rental activity in which the taxpayer does not materially participate.

Jennifer owns a home that she rents for 364 days and uses for personal purposes for one day.Jennifer is required to allocate expenses associated with the home between rental and personal use.

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.

Which of the following is a true statement?

If a taxpayer's marginal tax rate is decreasing,a taxpayer contributing to a traditional IRA can earn an after-tax rate of return greater than her before-tax rate of return.