1. In each of the following independent cases, indicate the amount (1) deductible for AGI, (2) deductible from AGI, and (3) neither deductible for nor from AGI before considering income limitations or the standard deduction. (Leave no answer blank. Enter zero if applicable.)
a. Ted paid $15 rent on a safety deposit box at the bank. In this box he kept the few shares of stock that he owned.
Deductible for AGI ? Deductible from AGI ? Not deductible ?
2.
b. Tyler paid $138 for minor repairs to the fence at a rental house he owned.
Deductible for AGI ? Deductible from AGI ? Not deductible ?
3.
c. Timmy paid $470 for health insurance premiums this year (not through an exchange and not with pre-tax dollars). Timmy is employed full-time and his employer paid the remaining premiums as a qualified fringe benefit.
Deductible for AGI ? Deductible from AGI ? Not deductible ?
4.
d. Tess paid $1,270 of state income taxes on her consulting income.
Deductible for AGI ? Deductible from AGI ? Not deductible ?
5. Doctor Bones prescribed physical therapy in a pool to treat Jackâs broken back. In response to this advice (and for no other reason), Jack built a swimming pool in his backyard and strictly limited use of the pool to physical therapy. Jack paid $25,400 to build the pool, but he wondered if this amount could be deducted as a medical expense. Determine if a capital expenditure such as the cost of a swimming pool qualifies for the medical expense deduction.
Multiple Choice
a. The entire expenditure incurred to build the pool qualifies for medical expense deduction.
b. Only part of the expenditure incurred to build the pool that does not result in any increase in the value of the residence qualifies for medical expense deduction
c. No expenditure incurred to build the pool qualifies for medical expense deduction as it permanently results in increase in value of the residence.
1. In each of the following independent cases, indicate the amount (1) deductible for AGI, (2) deductible from AGI, and (3) neither deductible for nor from AGI before considering income limitations or the standard deduction. (Leave no answer blank. Enter zero if applicable.)
a. Ted paid $15 rent on a safety deposit box at the bank. In this box he kept the few shares of stock that he owned.
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2.
b. Tyler paid $138 for minor repairs to the fence at a rental house he owned.
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3.
c. Timmy paid $470 for health insurance premiums this year (not through an exchange and not with pre-tax dollars). Timmy is employed full-time and his employer paid the remaining premiums as a qualified fringe benefit.
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4.
d. Tess paid $1,270 of state income taxes on her consulting income.
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5. Doctor Bones prescribed physical therapy in a pool to treat Jackâs broken back. In response to this advice (and for no other reason), Jack built a swimming pool in his backyard and strictly limited use of the pool to physical therapy. Jack paid $25,400 to build the pool, but he wondered if this amount could be deducted as a medical expense. Determine if a capital expenditure such as the cost of a swimming pool qualifies for the medical expense deduction.
Multiple Choice
a. The entire expenditure incurred to build the pool qualifies for medical expense deduction.
| b. Only part of the expenditure incurred to build the pool that does not result in any increase in the value of the residence qualifies for medical expense deduction
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Related questions
2. rene is disabled and receives payments from a number of sources. The interest payments are from bonds that Irene purchased over past years and a disability insurance policy that Irene purchased herself.
| Interest, bonds issued by City of Austin, Texas | $ | 4,800 |
| Social Security benefits | 10,200 | |
| Interest, U.S. Treasury bills | 2,400 | |
| Interest, bonds issued by Ford Motor Company | 2,700 | |
| Interest, bonds issued by City of Quebec, Canada | 1,370 | |
| Disability insurance benefits | 27,400 | |
| Distributions from qualified pension plan | 7,700 | |
Calculate Ireneâs gross income.
Gross income?
3. Louis files as a single taxpayer. In April of this year he received a $1,320 refund of state income taxes that he paid last year.
How much of the refund, if any, must Louis include in gross income under the following independent scenarios? Assume the standard deduction last year was $6,300. (Leave no answer blank. Enter zero if applicable.)
b. Last year Louis had itemized deductions of $4,520 and he chose to claim the standard deduction. Louisâs itemized deductions included state income taxes paid of $2,210.
Refund to be included?
4. a. Last year Louis claimed itemized deductions of $6,374. Louisâs itemized deductions included state income taxes paid of $2,210.
Refund to be included?
5. Anne purchased an annuity from an insurance company that promised to pay her $13,000 per year for the next ten years. Anne paid $102,050 for the annuity, and in exchange she will receive $130,000 over the term of the annuity.
a. How much of the first $13,000 payment should Anne include in gross income? (Do not round intermediate calculations.)
Amount to be included?
6. George and Weezy received $30,100 of Social Security benefits this year ($11,500 for George; $18,600 for Weezy). They also received $5,050 of interest from jointly owned City of Ranburne Bonds and dividend income.
What amount of the Social Security benefits must George and Weezy include in their gross income under the following independent situations? (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount. Leave no answer blank. Enter zero if applicable.)
a. George and Weezy file married joint and receive $9,250 of dividend income from stocks owned by George.
Amount to be included?
7. Terry was ill for three months and missed work during this period. During his illness, Terry received $7,250 in sick pay from a disability insurance policy.
What amounts are included in Terryâs gross income under the following independent circumstances? (Leave no answer blank. Enter zero if applicable.)
a. Terry has disability insurance provided by his employer as a nontaxable fringe benefit. Terryâs employer paid $5,350 in disability premiums for Terry this year.
Amount included?
8. This year, Janelle received $190,000 in life insurance proceeds. Under the following scenarios, how much of the $190,000 is taxable? (Leave no answer blank. Enter zero if applicable.)
a. Janelle received the proceeds upon the death of her father, Julio.
Taxable amount?
9. This year, Leron and Sheena sold their home for $1,150,000 after all selling costs. Under the following scenarios, how much taxable gain does the home sale generate for Leron and Sheena? (Leave no answer blank. Enter zero if applicable.)
a. Leron and Sheena bought the home three years ago for $200,000 and lived in the home until it sold.
Taxable gain: ?
10. Dontaeâs employer has offered him the following employment package.
| Salary | $ | 315,000 |
| Health insurance | 11,000 | |
| Dental insurance | 825 | |
| Membership to Heflin Country Club | 15,200 | |
| Season tickets to Atlanta Braves games | 4,100 | |
| Tuition reimbursement for graduate courses | 3,650 | |
| Housing allowance (for a McMansion in his neighborhood of choice) | 32,500 | |
What is Dontaeâs gross income from his employment?
Gross income?
