1. Iris is planning to make a charitable contribution to her church of $70,000. She can either give $70,000 of cash, or stock worth $750,000 and a basis of $10,000 and which she has held for 5 years. The donation of which property gives the better tax result? If Iris' AGI was $125,000, what other considerations would she have to take into account?

 

2. Amy has $150,000 of qualified student loans and pays $3,000 of interest expense. Amy has no other itemized deductions, so she will take the standard deduction. How much, if any interest expense will Amy be able to deduct on her tax return. Amy is single and had adjusted gross income of $45,000.

 

3. Drew and Joanne are going to buy a new car for $55,000. They are also going to buy a new home for $350,000. They obtain a mortgage of $275,000. They pay 2 points (2%) to the bank at the time they take out the mortgage. During the year they also pay $1,500 of interest expense to the bank on the mortgage. They borrow $50,000 from their broker. They put up the securities in their brokerage account as collateral. They use the $50,000 to purchase the car and they pay their broker $1,200 of interest expense during the year.  They have $3,500 of long-term capital gains during the year and no other income from their brokerage account. How much interest expense can they deduct on their tax return for the year?