| During 2011, Doris paid the following interest charges:Home mortgage$6,000On loan to purchase a new car$1,500On student loan$800If Doris itemizes her deductions for 2011, then the amount deductible for interest expense as an itemized deduction is: (Points : 5)$1,500. $6,000. $7,500. $8,300. None of the above |
| 4. (TCOs 3, 4, 5, & 7) Isabel’s income from her investments for the current year is as follows:Gain on the sale of Rosebud Country school bonds$3,000Interest on Rosebud County school bonds$8,500Interest received during the year on U.S. government bonds$6,500Total$18,000Isabel’s gross income from the above is: (Points : 5)$3,000. $9,500. $15,000. $18,000. None of the above |
| 5. (TCOs 3, 4, 5, & 7) Under the terms of a divorce agreement, Troy is to pay his wife Brook $1,200 per month. The payments are to be reduced to $800 per month when their 12-year-old child reaches age 18. During the current year, Troy paid $14,400 under the agreement. Assuming all of the other conditions for alimony are satisfied, Troy can deduct from gross income (and Brook must include in gross income) as alimony: (Points : 5)$0. $4,800. $9,600. $14,400. None of the above |
| 6. (TCOs 3, 4, 5, & 7) During the current year, Harold sustained a serious injury in the course of his employment. As a result of the injury sustained, he received the following payments during the year:Unemployment compensation$7,000Worker’s compensation$5,000Reimbursement from his employer’s accident and health plan for medical expenses paid by Harold$1,000Damages for physical personal injuries$8,000What is the amount to be included in Harold’s gross income for the current year? (Points : 5)$5,000 $6,000 $7,000 $8,000 None of the above |
| 7. (TCOs 3, 4, 5, & 7) IRA contributions should be treated as: (Points : 5)a deduction from AGI subject to the 2 percent of AGI floor. a deduction from AGI not subject to the 2 percent of AGI floor. not deductible. deductible for AGI. None of the above |
| 8. (TCOs 3, 4, 5, & 7) Which of the following items would be a miscellaneous itemized deduction on Schedule A of Form 1040 not subject to the 2% of AGI floor? (Points : 5)Appraisal fees Impairment-related work expenses of a handicapped person Hobby losses Professional dues None of the above |
| 9. (TCOs 7, 8, & 9) Matt and Shanekwa, ages 45 and 44, respectively, file a joint tax return for 2011. They provided all of the support for their 24-year-old son, who had $2,500 of gross income. Their 23-year-old daughter, a full-time student until her graduation on June 14, 2011, earned $6,000, which was 45% of her total support during 2011. Her parents provided the remaining support. Matt and Shanekwa also provided total support for Shanekwa’s father who is a citizen and life-long resident of Portugal. How many personal and dependency exemptions can Matt and Shanekwa claim on their 2011 income tax return? (Points : 5)Five Four Three Two None of the above |
| 10. (TCOs 2, 8, & 9) If a vacation home is used primarily for personal use (rented for less than 15 days per year), which of the following is true? (Points : 5)All expenses are deductible from AGI. Expenses must be allocated between rental and personal use. Depreciation is allowed as a deduction. All rental income is excluded from AGI. None of the above |
| 11. (TCOs 2, 8, & 9) Victoria, whose husband died in December 2009, maintained a household in which her dependent son lives. What is Victoria’s filing status for the tax year 2011? (Points : 5)Surviving spouse Single Married, filing separately Head of household None of the above |
| 12. (TCOs 2 & 11) Which, if any, of the following transactions will not accelerate the gain on an installment note? (Points : 5) |
