Fundamentals of Taxation

Business

Quiz 5 :
Itemized Deductions

Quiz 5 :
Itemized Deductions

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For those under age 65,only medical expenses in excess of 7.5 percent of adjusted gross income are deductible.
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True False
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Answer:

False

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In 2015,Roxanne's nephew was her dependent.For 2016,he no longer qualifies as her dependent.However,she paid $650 in 2016 for medical expenses she incurred in 2015 when he was her dependent.Roxanne can include the $650 in figuring her medical expense deduction in 2016.
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True False
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True

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The cost of aspirin and over-the-counter cough medicine is a deductible medical expense even though they are nonprescription drugs.
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True False
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Answer:

False

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Prescription drugs obtained outside the United States,such as from Canada,are never deductible on a U.S.tax return.
True False
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Premiums paid for long-term care insurance policies may be deductible as medical expenses.
True False
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A taxpayer generally has the option of deducting foreign taxes paid on Schedule A or taking a foreign tax credit.
True False
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For 2016,sales taxes are deductible as an itemized deduction based only on the actual amount of sales taxes paid.
True False
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Personal property taxes paid on personal-use assets,such as the family car,are deductible on Schedule A.
True False
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Taxpayers can deduct qualified residence interest on their principal residence and on a second residence selected by the taxpayer.
True False
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Loan fees that are not "points",or prepaid interest,are deductible as interest on Schedule A.
True False
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For 2016,the investment interest expense deduction is limited to the taxpayer's gross investment income.
True False
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For 2016,taxpayers may take an above-the-line deduction for the amount of mortgage insurance premium paid in 2016.
True False
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Rick and Claudia live in an apartment and have purchased land where they plan to build their home.They have a mortgage on the lot and have received a Form 1098 from the lender showing the interest paid on the note.Interest paid on this loan is deductible as home mortgage interest on their Schedule A.
True False
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In order to deduct a charitable contribution,taxpayers must itemize on their return.
True False
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Sid makes weekly cash contributions of $30 to his church.He pays by check.Since his annual contributions to the church are more than $250,he must obtain a written acknowledgment from the church to support his contribution deduction.
True False
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Individual taxpayers may carry forward for five years charitable contributions that are not allowed as a deduction in the current year due to the adjusted gross income limitation.
True False
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If donated appreciated capital gain property is put to a use that is unrelated to the purpose or function of a charity's tax-exempt status,the contribution must be reduced by the amount of any long-term capital gain that would have been realized if the property had been sold at its fair market value at the time of the contribution.
True False
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A taxpayer receives a deduction for services rendered to a charitable organization.
True False
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Theft losses are deducted in the tax year in which the theft was discovered,rather than the year of theft,if the discovery comes later.
True False
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Personal casualty losses resulting from termite damage are deductible.
True False
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