LSU ACCT 3221 Ch. 5 TEST QUESTIONS WITH ALL CORRECT ANSWERS GRADED A+
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LSU ACCT 3221 Ch. 5
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LSU ACCT 3221 Ch. 5
LSU ACCT 3221 Ch. 5 TEST QUESTIONS WITH ALL CORRECT ANSWERS GRADED A+
Which of the following expenses is not deductible as medical expense?
A. Insulin used for diabetes.
B.Wig, purchased upon the advice of a physician for the mental health of a patient who has lost all of his/her hair from dise...
LSU ACCT 3221 Ch. 5 TEST QUESTIONS
WITH ALL CORRECT ANSWERS
GRADED A+
Which of the following expenses is not deductible as medical expense?
A. Insulin used for diabetes.
B.Wig, purchased upon the advice of a physician for the mental health of a patient who
has lost all of his/her hair from disease.
C. Swimming lessons, recommended by a doctor for improvement of general health.
D. Acupuncture used to treat migraines. - Answer-C. Swimming lessons, recommended
by a doctor for improvement of general health.
Maria is single and age 32. In 2009, she had AGI of $35,000. During the year, she
incurred and paid the following medical costs:
Doctor and dentist fees = $1950
Prescription medicines = $275
Medical care insurance premiums = $340
Health club flee = $600
Crutches for a sprained ankle = $50
What is Maria's medical expense deduction (before application of the adjusted gross
income limitation)
for her 2009 tax return?
A. $3,215.
B. $3,165.
C. $2,940.
D. $2,615. - Answer-D. $2,615.
Which of the following costs are deductible on Form 1040, Schedule A, as taxes?
1. Real estate taxes on property owned in Mexico.
2. Property tax portion of vehicle registration, based on the value of the auto.
3. Fine for speeding.
4. Personal property tax on a pleasure boat.
A. 1, 2, and 4.
B. 3 and 4.
C. None of the items are deductible.
D. All of the items are deductible. - Answer-A. 1, 2, and 4.
During 2009, Sam paid the following taxes related to his home:
Property taxes on residence (paid from escrow account) = $1550
Property tax portion of car registration (based on value) = $400
Property taxes on land held for long-term appreciation = $350
What amount can Sam deduct as property taxes in calculating his itemized deductions
for 2009?
, A. $350.
B. $750.
C. $1,950.
D. $2,300. - Answer-D. $2,300.
Taxes deductible as an itemized deduction include all of the following except:
A. Personal property taxes based on the value of the property.
B. Taxes that the taxpayer paid on property owned by his/her parents or children.
C. State and local income taxes.
D. Real estate taxes based on the assessed value of the property. - Answer-B. Taxes
that the taxpayer paid on property owned by his/her parents or children.
Cynthia lives in California, a state that imposes a tax on income. The following
information relates to Cynthia's state income taxes for 2009:
Taxes withheld in 2009 = $3000
Refund received in 2009 from 2008 tax = $300
Assessment paid in 2009 for 2007 tax = $800
Assuming she elects to deduct state and local income taxes, what amount should
Cynthia use as an itemized deduction for state and local income taxes for her 2009
federal income tax return?
A. $1,100.
B. $2,700.
C. $3,800.
D. $4,100. - Answer-C. $3,800.
For investment interest expense in 2009, the deduction by a taxpayer is:
A. Limited to the investment interest paid in 2009.
B. Limited to the taxpayer's net investment income for 2009.
C. Not limited.
D. Limited to the taxpayer's investment income for 2009. - Answer-B. Limited to the
taxpayer's net investment income for 2009.
For 2009, Jorge, a single father, reported the following amounts relating to his
investments:
Net investment income from interest = $7000
Interest expense on a loan to purchase stocks = $2000
Interest expense on funds borrowed in 2008 to purchase land for investment = $6000
What is the maximum amount that Jorge can deduct in 2009 as investment interest
expense?
A. $1,000.
B. $2,000.
C. $6,000.
D. $7,000. - Answer-D. $7,000.
Which of the following interest expenses incurred by Amanda is treated as personal
interest expense and, therefore, not deductible as an itemized deduction?
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