Reference no: EM13703971

INCOME TAX (must be 100% of correct answers)
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The total of 7 questions :

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Question 7
A 42-year-old unmarried taxpayer has two sources of income: taxable wages and interest income of $57,000 and $6,300, respectively. If the taxpayer contributes to her 401(k) plan at work, what is the maximum amount that the taxpayer can both contribute and be able to deduct to her traditional IRA for 2014?


Question 7 options:


$1,820


$3,690


$3,685


$5,500


$1,815


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Question 8
A company's gross profit percentage is 30%. The company offers a 25% qualified employee discount to its key employees and a 15% discount to all other employees. If Kat, a key employee, and Trish, a non key, nonhighly paid employee, each purchase $100 worth of company goods, the amount Kat and Trish will include in gross income is:


Question 8 options:


$25 and $15, respectively.


$10 and $0, respectively.


$15 and $15, respectively.


$25 and $0, respectively.


$10 and $10, respectively.


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Question 9 A company offers its employee, Randy (age 56), $75,000 of group term life insurance coverage. The annual premium paid is $300. The company pays the entire premium. According to the Uniform Premium Table, the monthly amount for each $1,000 of excess coverage for someone 56 years old is $.43 If Randy is a key-employee of the company whose plan discriminates in favor of its key employees, the taxable amount of this fringe benefit is:


Question 9 options:


$0.


$387.


$300.


$129.


$100.

Question 16
Interest expenses eligible for deduction as itemized deductions include all of the following except:


Question 16 options:


interest on a $20,000 home equity loans to make personal purchases.


interest on student loans.


points paid on the purchase of the taxpayer's main home.


interest incurred to purchase land to be held as an investment.


all of the above are interest expense deductible as itemized deductions


Question 17
A loss of a taxpayer's property that is not deductible as a casualty and theft loss includes:


Question 17 options:


property that has been misplaced or lost.


damage to residence caused by a hurricane.


loss resulting from theft of the taxpayer's automobile.


loss from thefts not covered by insurance.


all of the above are deductible casualty losses.


Question 18
Justina purchased a vacation home on March 1st of the current year. In conjunction with the purchase she paid $3,000 in points to obtain a lower interest rate on her 15-year mortgage. How much of the $3,000 can Justina deduct in the current year?


Question 18 options:


$3,000


$200


$0


$180


none of the above


Question 20
The Martins file a joint return. Their AGI is $367,050. The Martins report the following amounts on Schedule A: home mortgage interest, $12,920; real estate taxes, $5,100; and $7,000 of cash gifts to qualified characters. The amount the Martins will deduct from AGI for their itemized deductions is:


Question 20 options:


$23,160.


$14,009.


$18,584.


$25,020.


$21,635.