Chapter 6

Question 1

business expense deductions are reported on Schedule ___

Answer 1

C

Question 2

rental or royalty income is deductible ____ AGI

Answer 2

for

Question 3

self-employment tax is deducted _____ AGI

Answer 3

for

Question 4

business expenses must be _____ and _____ to be deducted

Answer 4

ordinary and necessary

Question 5

taxpayers traveling to receive necessary medical care can deduct costs of:

Answer 5

transportation and lodging

Question 6

school loans are deductible _____ AGI, with a limit of $_____

Answer 6

for AGI, limit of $2,500 annually

Question 7

the deduction of investment interest is limited to a taxpayers net:

Answer 7

investment income

Question 8

formula for medical expenses deducted with AGI floor

Answer 8

(medical expenses) - (7.5% * AGI)

Question 9

MFJ homeowners can deduct interest on up to _____ of acquisition of indebtedness after 2017

Answer 9

$750,000

Question 10

2 types of interest expense deductible as itemized deductions:

Answer 10

1. interest on indebtedness secured by a qualified home
2. investment interest

Question 11

3 broad categories of For AGI deductions

Answer 11

1. directly related to business expense
2. indirectly related to business expense
3. miscellaneous items

Question 12

3 types of For AGI business income

Answer 12

1. trade or business
2. production of income
3. personal use

Question 13

business expenses are generally deductible ____ AGI

Answer 13

for

Question 14

which investment expense is For AGI and which is From AGI?

Answer 14

for: rent/royalty
from: interest expense

Question 15

income/loss from flow-through entities and rent/royalty expenses are reported on Schedule ____

Answer 15

E

Question 16

two types directly related to business activities

Answer 16

rent/royalty and flow-through entities

Question 17

four types indirectly related to business activities

Answer 17

1. moving expenses
2. health-insurance for self-employed
3. self-employment tax deduction
4. deductions for IRA

Question 18

when/where is it deductible?
moving expenses

Answer 18

FOR AGI, not deductible except if active military changing station

Question 19

when/where is it deductible?
deductions for IRA

Answer 19

FOR AGI, depends on income/whether employee or self-employed

Question 20

when/where is it deductible?
health insurance for self-employed

Answer 20

FOR AGI, can deduct premiums for taxpayer and dependents

Question 21

when/where is it deductible?
self-employment tax deduction

Answer 21

FOR AGI, half of self-employment taxes paid

Question 22

four categories of misc For AGI deductions

Answer 22

1. alimony (pre 2019)
2. education expenses (K-12) up to $300
3. interest on qualified education loan up to $2,500
4. attorney fees for IRS whistleblowers

Question 23

2 categories of FROM AGI deductions

Answer 23

1. larger of standard or itemized
2. 20% of QBI

Question 24

itemized deductions are reported on schedule ____

Answer 24

A

Question 25

7 categories of itemized deductions

Answer 25

1. medical/dental expenses
2. taxes
3. interest on qualified residence
4. investment interest expense
5. charity contributions
6. casualty/theft
7. other itemized (gambling, life annuity)

Question 26

SALT deductions are limited to ______ per year

Answer 26

$10,000

Question 27

2 categories of SALT deductions

Answer 27

1. SALT and foreign income taxes (can choose to deduct sales tax instead)
2. SALT property tax

Question 28

mortgage interest deduction cap

Answer 28

$750,000 for both residences

Question 29

mortgage interest is limited to:

Answer 29

principal use plus one other residence

Question 30

____ AGI deductions generally carry forward 5 years

Answer 30

From

Question 31

investment interest expense is deductible limited to ______

Answer 31

the amount of investment income

Question 32

are political contributions deductible?

Answer 32

no

Question 33

when are monetary charity contributions are deductible?

Answer 33

in year paid, including travel costs (14 cents per mile)

Question 34

how are property charity contributions deductible?

Answer 34

fair market value of the capital gains property on the date of donation

Question 35

taxpayer can only deduct the ______ if he received goods from charity he contributed to

Answer 35

excess

Question 36

must have a _______ _________ of charity contribution

Answer 36

written record (name of charity, date, how much given)

Question 37

cash donations to charity are limited to ____ of AGI

Answer 37

60%

Question 38

property donations to charity are limited to ______ of AGI

Answer 38

50%

Question 39

casualty losses are subject to a _____ floor per casualty

Answer 39

$100

Question 40

casualty losses are limited to _____ of AGI per year

Answer 40

10%

Question 41

3 factors for standard deduction amount

Answer 41

1. filing status
2. age of taxpayer (over 65)
3. legally blind

Question 42

timing strategy: bunching itemized deductions

Answer 42

shifting when deductions are paid to try to maximize itemized deduction

Question 43

standard deduction for an individual claimed as a dependent

Answer 43

larger of:
1. $1,250 or
2. $400 plus earned income up to a total of regular standard deduction

Question 44

which two specified services or trades are allowed to be claimed as QBI?

Answer 44

architecture and engineering

Question 45

when does the QBI exclusion of services rule not apply?

Answer 45

when the taxpayer is lower income