1. Ted pays $2,100 interest on his automobile loan, $120 interest on a loan to purchase a computer for personal use, $630 interest on credit cards, and $1,100 investment interest expense. Ted has net investment income of $850. Ted's deductible interest is
A) $850. B) $3,200. C) $1,100. D) $2,950.
2. Grace has AGI of $60,000 in 2012 and 2013. She makes cash contributions to public charities of $34,000 in 2012 and $31,000 in 2013. Grace's charitable contribution carryover to 2014 is
A) $0. B) $1,000. C) $5,000. D) $4,000.
3. Which of the following is not required substantiation for a noncash charitable contribution?
A) date and location of property donated
B) method used to determine the donated property's fair market value
C) name and address of charitable organization
D) use of donation by charitable organization
4. Liz, who is single, lives in a single family home and owns a second single family home that she rented for the entire year at a fair rental rate. Liz had the following items of income and expense during the current year.
Income:
|
Gross salary and commissions from Ace Corporation
|
$50,000
|
|
Rent received from tenant in Liz's rental house
|
13,000
|
|
Dividends received on her portfolio of stocks
|
5,000
|
Expenses:
|
Unreimbursed professional dues
|
200
|
|
Subscriptions to newsletters recommending stocks
|
900
|
|
Taxes, interest and repair expenses on rental house
|
3,500
|
|
Depreciation expense on rental house
|
2,300
|
What is her adjusted gross income for the year?
A) $62,200 B) $52,700 C) $61,100 D) $68,000
5. Generally, deductions for adjusted gross income on an individual's tax return include all the following types of expenses expect those
A) incurred in a trade or business.
B) incurred in the production of royalty income.
C) incurred in the production of rent income.
D) incurred in gambling activities.