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Topic 8-Deductions: Itemized Deductions 103 18. The unreimbursed 2015 employee travel expenses of an outside salesperson are: a. Fully deductible from gross income in arriving at adjusted gross income. b. Deductible only as miscellaneous itemized deductions subject to a two percent floor c. Fully deductible only as miscellancous itemized deductions. d. Never deductible. t flcor 19. For the year ended December 31, 2015, Lou Simpson, a married taxpayer filing a joint return, $24,000 reported the following: Investment income from interest Investment expenses Interest expense on funds borrowed in 2014 to purchase investment What amount can Lou deduct in 2015 as investment interest expense? a. $45,000 b. $47,000 c. $49,000 d. $51,500 20. Karen Kurtz purchased a home for $380,000 during 2007, borrowing $300,000 of the purchase price, which was secured by a 20-year mortgage. In 2015, when the home was worth $425,000 and the balance of the first mortgage was $240,000, Karen obtained a second mortgage on the home in the amount of $130,000, using the proceeds to purchase a car and to pay off personal loans. For 2015, what amount of Karen's $370,000 of home mortgage debt will qualify as "qualified residence indebtedness"? a. $100,000 b. $240,000 c. $340,000 d. $370,000 21. Kate Harris had adjusted gross income in 2015 of $20,000. The following information pertains to her beach house which was destroyed by a hurricane. Cost basis .. . Value before casualty... Value after hurricane Insurance recovery. $90,000 100,000 5,000 85,000 Iasurance recovery Her city apartment was also broken into and a necklace with a cost of $3,000 and a value of $5,000 was stolen. She recovered $5,000 from the insurance company. What is her casualty loss deduction for 2015? a. $900 b. $4,900 c. $5,000 d. $5,900 e. $7,900