A Married Filing Separately taxpayer has an AGI of $545,000. His itemized deductions total $35,000 and consist of mortgage interest, charitable contributions, state taxes and employee business expenses. Which of the following is the most accurate?
Select one:
a. The taxpayer will not be allowed to deduct any of his itemized deductions.
b. The taxpayer will be allowed to deduct $35,000 of his itemized deductions.
c. The taxpayer will be allowed to deduct $23,357 of his itemized deductions.
d. The taxpayer will only be allowed to deduct $7,000 of his itemized deductions.
Anne, single, has decided to give money as Christmas gifts this year. She gives the following amounts:
Christie – her daughter $20,000
Evelyn – her daughter $20,000
Helen – her friend $10,000
Claude – her ex-husband $25,000
Has Anne exceeded the federal gift tax exclusion? If yes, then by how much?
Select one:
a. No, because she was allowed to give a total of $14,000 × 3 + $149,000 which is $191,000 before she exceeded the exclusion.
b. Yes, she exceeded it by $23,000.
c. Yes, she exceeded it by $19,000.
d. Yes, she exceeded it by $12,000
Bob is single, age 35, with a dependent child living with him. He has AGI of $415,850 for 2017. Included in the AGI, he has gambling winnings of $2,000. He has the following expenses for the year:
Mortgage Interest
$18,000
Credit Card Interest
$3,500
State Income Taxes
$21,000
Real Estate Taxes
$3,800
Personal Property Taxes
$ 1,550
Charitable Contribution
$7,000
Gambling Losses
$ 4,500
Medical Expenses (after limitation)
$5,000
What is the amount of Bob’s itemized deductions for 2017?
Select one:
a. $54,504
b. $58,004
c. $57,004
d. $58,350
Stacey’s federal tax return was rejected after it was electronically filed. Which statement is correct?
Select one:
a. Rejected Federal electronic return data due to errors may also cause the state electronic return data to reject.
b. Rejected Federal electronic return data due to errors will not cause the state electronic return data to reject.
c. If the state electronic return data is rejected by the IRS due to error, the Federal electronic return data will not reject.
d. Once both are accepted by the IRS, a subsequent rejection of state electronic return data by a state tax administration agency will affect the accepted Federal electronic return data.
Miranda is 18 and lives with her mother, Louise. Miranda has a daughter, Ashley, who is 1 year old. Miranda has an AGI of $9,000 and Louise has an AGI of $32,000. Which statement is true?
Select one:
a. Louise can claim Miranda as her qualifying child for EIC and Miranda can claim Ashley as her own qualifying child for EIC.
b. Louise can only claim Ashley for the purpose of the EIC because Miranda does not meet the age test.
c. If Miranda does not claim the exemption and EIC for Ashley, her mother Louise can claim Ashley for those purposes.
d. Miranda and Louise can both claim Ashley as a qualifying child for EIC.
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