QUESTION 1

• You (a young person) bought a house in 2004 for $150,000. Sadly, you suffered an injury in 2020. Your doctor prescribes water aerobics as your therapy and prescribes building a pool. You spend $31,000 to build the pool. Because you built the pool your house now appraises for $165,000. Assume all of your other injury related costs were covered by your health insurance, which you pay (after-tax) $4,400 a year for. If your AGI is $200,000, what is your allowable medical expense deduction?

		$0
		$20,400
		$400
		$35,400
		$5,400

0.5 points

QUESTION 2

• I donate my old furniture to a Goodwill, a public charity. I paid around $25,000 for my furniture in 2006. I feel its worth around $16,000 today as it's not too badly scuffed up. How much of a charitable deduction can I take if I remember to get a receipt from the charity? Assume my AGI is $30,000.

		$25,000
		$1,000
		$9,000
		$16,000
		$15,000

0.5 points

QUESTION 3

• You had the following tax items: $5,000 state income taxes paid, $4,500 state sales taxes paid, $4,700 in property taxes, $500 in ad valorem taxes on your car. How much should you claim on your itemized deductions for state and local taxes?

		$10,200
		$14,700
		$10,000
		$9,200
		$9,700

0.5 points

QUESTION 4

• Meg (single taxpayer)pays $1,900 in student loan interest. Her AGI is $77,000. What is her For AGI student loan deduction?

		$0
		$1,900
		$1,013
		$887

0.5 points

QUESTION 5

• A taxpayer is moving across the country when his UHaul moving truck is stolen. His belongs had a basis of around $35,000. FMV is tough to calculate, but he spent around $28,000 replacing the lost items in his new home. Speaking of which, his new home was destroyed a month later in an earthquake. A federal disaster area was declared for the earthquake. The basis of the home was $100,000 and since it was just purchased the FMV of the home was also $100,000. The insurance reimbursement was $90,000 for the items destroyed in the earthquake. There was no insurance reimbursement for the theft. Before the AGI limitation, what is the taxpayer's casualty loss amount? (Include the per event limitation.)

		$44,800
		$10,000
		$37,800
		$9,900
		$45,000

0.5 points

QUESTION 6

• The IRS believes that your Schedule C business is actually a hobby. Which of the following places the burden of proof on the IRS?

		you advertise once a month in your local newspaper
		You pay a professional bookkeeper
		you spend less than 20 hours a week on the activity
		you earn a profit during the last 3 out of 5 years
		All the answers places the burden of proof on the IRS

0.5 points

QUESTION 7

• John has a Schedule C business on his personal tax return. He plans on taking the standard deduction. Since he is taking the standard deduction as his From AGI deduction he should not worry about the Deduction for Qualified Business Income (QBI). The Deduction for QBI is only for taxpayers that take itemized deductions.

		True
		False

0.5 points

QUESTION 8

• Mary, a single taxpayer, operates a printing business as a sole proprietor. The business has two employees who are paid a total of $85,000. Assume that the business has no significant assets. The business generates $60,000 of income, and her taxable income before the QBI deduction is $75,000. What is Mary's deduction for QBI?

		$42,500
		$13,750
		$15,000
		$12,000
		$0

0.5 points

QUESTION 9

• Tommy, a married taxpayer, operates a retail business as a sole proprietor. The business has three employees who are paid a total of $120,000. Assume that the business has no significant assets. The business generates $370,000 of income, and his taxable income before the QBI deduction is $475,000.What is Tommy's deduction for QBI?

		$60,000
		$14,000
		$74,000
		$95,000
		$0

0.5 points

QUESTION 10

• Jane, a single taxpayer, operates a farm as a sole proprietor. The farm has two employees who are paid a total of $40,000. Assume that the business has no significant assets. The business generates $130,000 of income, and her taxable income before the QBI deduction is $175,000. What is Jane's deduction for QBI?

		$25,298
		$20,000
		$24,788
		$18,596
		$26,000