.png){kind=logo}
TRUE/FALSE. Write 'T' if the statement is true and 'F' if the statement is false.1)The profit motive distinguishes "business" activities from "personal" activities.
Answer:True False
2)All business expense deductions are claimed as "above the line" deductions.
Answer:True False
3)All investment expenses are itemized deductions.
Answer:True False
4)Rental or royalty expenses are deductible "for" AGI.
Answer:True False
5)To be deductible, business expenses must be directly related to a business activity.
Answer:True False
6)The phrase "ordinary and necessary" means that an expense must be appropriate and helpful for generating a profit.
Answer:True False
7)All reasonable moving expenses are deductible if the move is a minimum of 35 miles in distance from the taxpayer's old residence to the taxpayer's new residence.
Answer:True False
8)To deduct a moving expense, the taxpayer must be employed or self-employed for a specific amount of time after the move.
Answer:True False
9)Self-employed taxpayers can deduct the cost of health insurance as long as they do not actually participate in their spouses' employer-provided health plan.
Answer:True False
10)Self-employed taxpayers can choose between claiming a deduction or a credit for the employer portion of self-employment taxes paid.
Answer:True False
11)An individual who forfeits a penalty for prematurely withdrawing a certificate of deposit (CD) is allowed to net the penalty against the interest income from the CD.
Answer:True False
12)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.
Answer:True False
1 Taxation of Individuals and Business Entities 2018 Edition 9th Edition Spilker Solutions Manual Visit TestBankDeal.com to get complete for all chapters
13)The definition of qualifying expenses is more restrictive for the qualified educational expense deduction than it is for the education loan interest expense deduction.
Answer:True False
14)The medical expense deduction is designed to provide relief for doctors and medical practitioners.
Answer:True False
15)Deductible medical expenses include payments to medical care providers such as doctors, dentists, and nurses and medical care facilities such as hospitals.
Answer:True False
16)Taxpayers traveling for the primary purpose of receiving essential and deductible medical care may deduct the cost of travel.
Answer:True False
17)The deduction for medical expenses is limited to the amount of unreimbursed qualifying medical expenses paid during the year reduced by two percent of the taxpayer's AGI.
Answer:True False
18)The itemized deduction for taxes includes all types of state, local, and foreign taxes.
Answer:True False
19)Taxpayers may elect to deduct state and local sales taxes insteadof deducting state and local income taxes.
Answer:True False
20)Taxpayers are allowed to deduct mortgage interest on up to $1,000,000 of acquisition debt for their qualified residence and on up to $500,000 of home-equity debt.
Answer:True False
21)The deduction for investment interest in excess of the net investment income carries forward to the subsequent year.
Answer:True False
22)To qualify as a charitable deduction the donation must be made by cash or by check.
Answer:True False
23)In general, taxpayers are allowed to deduct the fair market value of long-term capital gain property on the date of the donation to a qualified charitable organization.
Answer:True False
24)The deduction to individual taxpayers for charitable contributions paid in cash made to public charities is limited to ten percent of the taxpayer's AGI whereas casualty losses on personal assets are only deductible to the extent the losses exceed ten percent of the taxpayer's AGI.
Answer:True False
2
25)Unreimbursed employee business expenses, investment expenses, hobby expenses, and certain other expenses are classified as miscellaneous itemized deductions and are deductible only to the extent that their sum exceeds 2% of the taxpayer's AGI.
Answer:True False
26)Taxpayers are allowed to deduct all ordinary and necessary expenses incurred in connection with determining their tax obligations imposed by federal authorities.
Answer:True False
27)Bunching itemized deductions is one form of tax evasion.
Answer:True False
28)Taxpayers generally deduct the lesser of their standard deduction or their itemized deductions.
Answer:True False
29)Taxpayers filing single and taxpayers filing married separate have the same basic standard deduction amount.
Answer:True False
30)An individual who is eligible to be claimed as a dependent on another's return and has $1,000 of earned income may claim a standard deduction of $1,350.
Answer:True False
31)In 2017, personal and dependency exemptions are $6,350 for single taxpayers.
Answer:True False
MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.32)Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for
AGI) because:
A)health insurance premiums cannot be deducted otherwise.B)self-employed taxpayers need an alternate mechanism for reducing the cost of health care.C)this deduction provides a measure of equity between employees and the self-employed.D)employers are allowed to deduct social security (FICA) taxes as a business expense.E)None of the choices are correct.
Answer:C
3
33)Which of the following is a true statement?A)Congress allows self-employed taxpayers to deduct the employer portion of their self-employment tax.B)Business activities never require a relatively high level of involvement or effort from the taxpayer.C)To deduct expenses associated with any profit motivated activity, taxpayers must maintain a high level of involvement or effort in the activity throughout the year.D)All business expenses are deducted for AGI.E)All of the choices are true.
Answer:A
34)Which of the following is a true statement?A)Unreimbursed employee business expenses are deductible as miscellaneous itemized deductions.B)Business deductions are one of the most common deductions for AGI but they are not readily visible on the front of Form 1040.C)The distinction between business and investment expenses is critical for determining whether a deduction is claimed above the line (for AGI) or below the line (itemized).D)With one exception, investment expenses are deductible as itemized deductions.E)All of the choices are true.
Answer:E
35)Which of the following is a true statement?A)Tax preparation fees are deducted for AGI.B)All business expenses are deducted for AGI.C)Rental and royalty expenses are deducted for AGI.D)Investment expenses are typically deducted for AGI.E)All of the choices are true.
Answer:C
36)Which of the following is a true statement?A)The moving expense deduction is restricted to expenses associated with moving personal possessions to the new residence.B)To satisfy the business test, the taxpayer must be employed full-time for 45 of the first 52 weeks after the move.C)To satisfy the distance test, the distance from the taxpayer's old residence to the new place of work must be at least 50 miles more than the distance from the old residence to the old place of work.D)Individuals qualify for the moving expense deduction only if they change employers.E)All of the choices are true.
Answer:C
4
.png)