Question 1

A) In 2020, the U.S. President declared a federal disaster due to flooding in Minnesota. Lisa lives in that area and lost her home in the flood. What choice does she have regarding when she can claim the loss on her tax return?

• A.It must be claimed in 2020 if the loss is greater than the modified adjusted gross income.

• B.It must be claimed in 2019 if the return has not been filed by the date of the loss.

• C.It may be claimed in 2019 or 2020.

• D.It may be claimed in 2021 if an election is filed with the 2020 return.

B)

Which of the following expenses are deductible on Form 1040 Schedule A in 2020?

• A.Fees paid to a broker to collect taxable bond interest or dividends on shares of stock.

• B.Gambling losses up to the amount of gambling winnings.

• C.Damages paid to a former employer for breach of employment contract, when the damages are attributable to pay received from that employer.

• D.Repayment of $3,000 of ordinary income that had been included in taxable income in an earlier year.

C)

A calendar-year taxpayers home was destroyed by a flood in Year 2 and was located in a town declared a federal disaster area. A casualty loss of $10,000 was figured under the usual rules. On what return can the casualty loss be claimed?

• A.On either the Year 2 or the Year 1 return.

• B.Split the loss between Year 2 and Year 1.

• C.Only on the Year 1 return.

• D.Only on the Year 2 return.

D)

Humberto purchased a new home on March 15, 2019, in a county that assesses real estate property taxes in the succeeding year (i.e., 2019 taxes assessed in 2020). At the closing on his new home, Humberto received the following credits against the purchase price of the home:

2018 real estate property taxes	$2,000
2019 real estate property taxes prorated	420

In 2019, when the real estate property tax bill for 2018 came in, Humberto had to pay $2,200 total. The real estate property tax bill for 2019 rose to a total of $2,350, which he paid when he received it in 2020. What is the amount of Humbertos deduction for real estate property taxes on his 2019 and 2020 income tax returns?

• 2019	2020

• A.

  2019 $0

  2020 $1,880

• B.

  2019 $2,200

  2020 $2,350

• C.

  2019 $200

  2020 $1,930

• D.

  2019 $0

  2020 $1,930

E)

Ms. Boones records for 2020 reflect the following information:

1. Paid $8,500 to a church of which $5,000 was contributed to the church and $3,500 was paid to enroll her child in its school.
2. Paid $100 dues to a business organization.
3. Paid $1,500 cash to the University of Florida scholarship fund.
4. Donated stock having a fair market value of $1,500 to a qualified charitable organization. She purchased the stock 2 years earlier for $3,000.

Ms. Boones adjusted gross income for 2020 was $25,000. What is the amount of her charitable contribution deduction?

• A.$9,600

• B.$7,500

• C.$8,000

• D.$12,500

F)

On March 28, 2021, Rita sustained a loss to her personal property due to an earthquake. The property was in an area declared by the President of the United States to be eligible for federal disaster assistance. Based on the following facts, what is the maximum amount of Ritas casualty loss that can be deducted on her 2020 tax return, due April 15, 2021?

Fair market value before the earthquake	$23,000
Fair market value after the earthquake	6,300
Cost basis	30,000
Disaster relief funds received to replace
lost property	2,300
Adjusted gross income for 2020	27,000

• A.$16,700

• B.$11,600

• C.$14,400

• D.$30,000