Andrew and Karen are married and file jointly. Andrew is 70 years old and in good health. Karen is 63 years old and blind. What amount of standard deduction can the couple claim in 2018?

A single taxpayer, has a $290,000 loss from her sole proprietorship. How much of this loss is not deductible after considering the excess business loss rules?

In the current year, Norris, an individual, has $50,000 of ordinary income, a Net Short Term Capital Loss (NSTCL) of $10,000 and a Net Long Term Capital Gain (NLTCG) of $2,800. From his capital gains and losses, Norris reports: A. an offset against ordinary income of $10,000. B. an offset against ordinary income of $3,000 and a NSTCL carryforward of $7,000. C. an offset against ordinary income of $2,800 and a NSTCL carryforward of $7,200. D. an offset against ordinary income of $3,000 and a NSTCL carryforward of $7,200. E. an offset against ordinary income of $3,000 and a NSTCL carryforward of $4,200.

Carols employer loaned her $9,000 this year (interest-free) to buy a condo. If the federal interest rate was 4%, which of the following is correct? A. Carol recognizes $360 of taxable interest income. B. Carols employer recognizes $360 of deductible interest expense. C. Carol recognizes $360 of imputed compensation income. D. Carol recognizes $360 of imputed dividend income. E. $0 imputed interest income is recognized.

Manny is an unmarried law student at Dartmouth University, a qualified educational institution. Last year Lewis borrowed $30,000 and used the proceeds to pay his university tuition. This year Lewis paid $3,000 of student loan interest. Which of the following is a true statement if Lewis reports $40,000 of salary and no other items of income or expense?

Colleen bought 1,000 shares of GE Corporation stock for $5,000 on January 15, 2016. On December 31, 2018 she sold all 1,000 shares of her GE stock for $4,500. Based on a hot tip from her friend, she bought 1,000 shares of GE stock on January 20, 2019 for $3,000. What is Colleens recognized loss on her 2018 sale and what is her basis in her 1,000 shares purchased in 2019? A. $-0- LTCL and $3,500 basis. B. $200 LTCL and $3,300 basis. C. $300 LTCL and $3,200 basis. D. $400 LTCL and $3,100 basis. E. $500 LTCL and $3,000 basis

Nora is an active participant in the rental condominium property she owns. During the year, the property generates a ($30,000) loss; however, she has sufficient tax basis and at-risk amounts to absorb the loss. If Nora has $85,000 of salary, $10,000 of long-term capital gains, $3,000 of dividends, and no additional sources of income or deductions, how much loss can she deduct? A. Zero; losses from rental property are passive losses and can only be offset by passive income. B. $25,000. C. $11,000. D. $15,000. E. None of the choices are correct.

Unused investment interest expense: A. expires after the current year. B. is carried back two years. C. is carried forward twenty years. D. is carried forward indefinitely. E. None of the choices are correct.

Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for AGI) because

A. employers are allowed to deduct social security (FICA) taxes as a business expense. B. self-employed taxpayers need an alternate mechanism for reducing the cost of health care. C. this deduction provides a measure of equity between employees and the self-employed. D. health insurance premiums can not be deducted otherwise. E. None of the above

Identify the rule dictating that on a sale of an asset a taxpayer need only include the incremental gain in gross income rather than the entire proceeds from the sale:

Return of capital principle

This year Norma, a single taxpayer, paid $11,200 of real estate taxes on her personal residence and 9,500 of state income taxes. Which of the following is a true?

A. Norma can deduct 20,700 for AGI. B. Norma should deduct $11,200 even if her standard deduction is $12,000. C. Norma should deduct $20,700 even if her standard deduction is $12,000. D. Norma should deduct $9,500 even if her standard deduction is $12,000. E. Norma should claim the standard deduction.

To calculate a gain or loss on the sale of an asset, the proceeds from the sale are reduced by which of the following?

tax basis of the property AND selling expenses

Which of the following is a true statement? A. A taxpayer can deduct medical expenses incurred for members of his family who are dependents. B. Medical expenses incurred for a qualified relative even if the relative does not meet the gross income test. C. A divorced taxpayer can deduct medical expenses incurred for a child even if the child is claimed as a dependent by the former spouse. D. Deductible medical expenses include long-term care services for disabled spouses and dependents. E. All of the choices are true.

Which of the following is a true statement about the first payment received from a purchased annuity?

the payment is included in gross income b) a portion of the payment is a return of capital c) the payment can only be taxed in the year after the annuity was purchased d) the payment is not taxed until the annuity payments cease altogether.

Which of the following taxes will not qualify as an itemized deduction? A. Personal property taxes assessed on the value of specific property. B. State, local, and foreign income taxes. C. Real estate taxes on a residence. D. Gasoline taxes on personal travel. E. None of the above qualifies as an itemized deduction. Gasoline taxes on personal travel are not deductible.

At the end of the year, Sally had the following capital gains (losses) from the sale of her investments: $2,000 LTCG, $25,000 STCG, ($9,000) LTCL, and ($15,000) STCL. What is the amount and nature of her capital gains and losses?

3,000 net short-term capital gain

.$3,000 net long-term capital loss.

$4,000 net short-term capital gain.

$4,000 net long-term capital loss.

None of the above