Final Exam > Results Page
final exam score:
85%
Question 1
Correct
The 2012 standard deduction for a dependent with earned income of $2,000 and unearned income of $1,000 is:
$2,000
(You Answered) (Correct Answer) $2,300
$3,800
$5,950
Question 2
Correct
What is the deduction for a single taxpayer with tuition and fees of $10,000 and modified adjusted gross income of $75,000?
(You Answered) (Correct Answer) $2,000
$3,000
$4,000
$10,000
Question 3
Correct
Which of the following individuals cannot claim the $250 educator deduction (assume each meets the 900-hour test and is involved in K-12)?
Classroom aide
Principal
Guidance counselor
(You Answered) (Correct Answer) Parent who homeschools her child
Question 4
Correct
Susan James met all the requirements to deduct moving expenses when she moved from Arizona to Nevada. Which of the following are deductible as moving expenses?
Costs of pre-move house-hunting trips
Meal expenses
(You Answered) (Correct Answer) Costs of traveling to her new home
Cost of getting out of a lease on her old home
Question 5
Incorrect
Mark Hanson is being permanently transferred from his office in Virginia to another office in Washington, D.C. His office in Virginia is 10 miles from his home. For Mark to meet the distance test to qualify for moving expense deductions, how many miles must the office in Washington, D.C., be from his current home?
(You Answered) 50
40
(Correct Answer) 60
10
Question 6
Incorrect
An employer pays the moving cost to relocate an employee across the country. Which of the following statements is correct? Assume costs paid would be deductible by the employee.
The employee must report the employer’s payment of moving costs as income but can claim an itemized deduction to offset the income.
(Correct Answer) The employee does not have any income from the employer’s payment.
(You Answered) The employee must report the employer’s payment of moving costs as income but can deduct this amount as an adjustment to gross income.
The employee can deduct the costs even though paid by the employer.
Question 7
Correct
In 2012, a single taxpayer’s AGI is $45,000. His medical costs (minus insurance reimbursements) total $6,500. He may deduct only medical costs in excess of:
$1,125
(You Answered) (Correct Answer) $3,375
$4,500
$6,500
Question 8
Correct
All of the following procedures qualify as a deductible medical expense except:
(You Answered) (Correct Answer) Face lift
Laser eye surgery
Breast reconstructive surgery
In vitro fertilization for a female having difficulty with conception
Question 9
Correct
A taxpayer has dental work done in December 2012 and charges the expenses to his credit card. None of the work is covered by insurance. He pays the charge bill in January 2013. To minimize his tax liability, he should:
(You Answered) (Correct Answer) Deduct the expenses in 2012 using his AGI for 2012
Deduct the expenses in 2013 using his AGI for 2012
Deduct the expenses in 2012 using his AGI for 2013
Not deduct anything in 2012 or 2013
Question 10
Incorrect
Deductible taxes include all of the following except:
Real estate taxes based on the assessed value of the property and charged uniformly against all property
State and local income taxes
Personal property taxes based on the value of the personal property
(Correct Answer) Taxes paid by parents on property owned by children
Question 11
Incorrect
All of the following taxes could be deductible as itemized deductions except:
(Correct Answer) FICA paid by an employee on his/her wages
Local property tax
Ad valorem personal property tax
Foreign income taxes
Question 12
Correct
Which of the following interest expenses incurred by Leila Jackson is treated as nondeductible personal interest?
(You Answered) (Correct Answer) Interest on an ordinary bank loan used to pay for her son’s medical care
Interest on a home equity loan of $75,000
Bonds purchased with accrued interest
Interest incurred by a partnership in which Leila is a limited partner
Question 13
Incorrect
Interest incurred to purchase tax-exempt bonds is:
Deductible as business interest
(You Answered) Deductible as investment interest
(Correct Answer) Nondeductible
Deductible as personal interest
Question 14
Correct
Points paid on a mortgage for a principal residence can be deducted in full in the year of payment except if the mortgage is taken to:
(You Answered) (Correct Answer) Pay off an existing mortgage on the residence (e.g., refinance at a lower rate)
Improve the residence
Buy a principal residence
Construct a principal residence
Question 15
Correct
Which type of interest can be deducted without itemizing?
Mortgage insurance premiums
(You Answered) (Correct Answer) Student loan interest
Investment interest
Home mortgage interest
Question 16
Correct
In 2012, Harrison donates $25 each week to his church. Which of the following is not acceptable substantiation for the donations?
A bank statement reflecting payment by check
A written acknowledgment from the church showing total annual contributions
A credit card statement reflecting payment by credit card
(You Answered) (Correct Answer) A diary with weekly notations of his contributions
Question 17
Correct
In 2012, Harold Stanton donates his old car to a reputable charity. He believes the car is worth $1,000; the charity immediately sells it at auction for $600 and provides Harold with a written acknowledgment. What can Harold deduct?
$500
(You Answered) (Correct Answer) $600
$1,000
None of the above
Question 18
Correct
On November 18, 2012, Maryann Reilly donates two bags of items of used clothing to the Salvation Army. Some of the items are in good used condition, whereas others are in poor condition. Which statement is correct (assume proper substantiation)?
She may deduct the value of all of the items.
She may deduct her cost for all of the items.
She may not deduct the value of any of the items.
(You Answered) (Correct Answer) She may deduct only the value of the items in good used condition or better.
Question 19
Correct
In December 2012, George Baker contributes cash to public charities. What, if anything, is his deduction for these donations limited to?
10% of adjusted gross income
30% of adjusted gross income
(You Answered) (Correct Answer) 50% of adjusted gross income
There is no limit.
Question 20
Correct
Unused charitable contributions (in excess of the AGI limit):
Can be carried forward for two years
(You Answered) (Correct Answer) Can be carried forward for five years
Can be carried forward indefinitely
Are lost forever