Deductible miscellaneous itemized deduction

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Reference no: EM132240028

Tom is a former executive who is retired. This year he received $260,000 in pension payments and $10,000 of social security payments. What amount must Tom include in his gross income?

$270,000 B. $268,500 C. $258,500 D. $260,000 E. Zero

This year he received $260,000 in pension payments and $10,000 of social security payments. What amount must Tom include in his gross income?.

Sam and Sue file a joint tax return and decide to itemize their deductions. Their income for the year consists of $90,000 in salary, $2,000 interest income, $800 long-term capital loss. Their expenses for the year consist of $2,300 investment interest expense. Assuming that the couple’s marginal tax rate is 35 percent, what is the amount of their investment interest expense deduction for the year?

investment income includes:

A. interest income. B. net short-term capital gains. C. non-qualified dividends. D. royalty income. E. All of the choices are correct.

Gwen purchased an annuity that provides $12,000 quarterly payments for the next 15 years. The annuity was purchased at a cost of $300,000. How much of the first quarterly payment will she include in her gross income?

This year Patrick realized a gain on the sale of a valuable piece of art that he inherited from his uncle. The buyer has promised to pay Patrick in installment payments over the next 10 years. Identify the principle that will determine when Patrick should be taxed on the gain from the sale:

realized a gain on the sale of a valuable piece of art that he inherited from his uncle. The buyer has promised to pay Patrick in installment payments over the next 10 years. Identify the principle that will determine when Patrick should be taxed on the gain from the sale:

investment interest expense does not include: mutual funds? Homework problem I think

Carl is employed as an executive and his wife, Nancy, is a self-employed accountant. Besides his salary, Carl and Nancy own a commercial office building that they rent to a local businesses. This year they paid $2,000 for heating the building. Nancy also paid self-employment tax of $8,000 and Carl had $9,800 of Social Security taxes withheld from his pay. Nancy paid $150 fee to rent a safe deposit box to store client records. Which of the following is a true statement?

A. One-half of the social security tax is deductible for AGI.

B. Only the heating bill for the building is deductible for AGI.

C. The self-employment tax is not deductible.

D. The safe deposit fee and the heating bill are deductible for AGI

E. The safe deposit fee, the heating bill, and the employer portion of the SE taxes are deductible for AGI.

Generally, which of the following does not correctly categorize the type of income?

A. Rental real estate − passive income/loss.

B. Salary − active income/loss.

C. Dividends − passive income/loss.

D. Capital losses − portfolio income/loss.

E. All of the choices are correct.

Long-term capital gains (depending on type) for individual taxpayers can be taxed at a maximum rate of:

A. 20 percent

B. 28 percent

C. Both 20 percent and 28 percent

D. All of these.

Which of the following is a deductible miscellaneous itemized deduction?

Paula deducted $2,400 of state income taxes on her tax return last year. This year she received a state income tax refund of $180. What amount of the refund, if any, should she include in her gross income if last year her total itemized deductions exceeded the standard deduction by $350?

Connie has a $30,000 certificate of deposit (CD) at the local bank. The interest on this certificate, $2,000, was credited to her account this year but she must pay an early withdrawal penalty if she cashes in the CD before next year. Which of the following is a true statement?

A. Connie must include the $2,000 of interest in her income this year.

B. Connie must include the $2,000 of interest in her income when she cashes the CD.

C. Connie must include the $2,000 of interest in her income this year only if the bank waives the early withdrawal penalty.

D. Connie must include the $2,000 of interest in her income next year if she does not pay the early withdrawal penalty.

E. All of the choices are correct

Reference no: EM132240028

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