1. During the current year, Ralph made the following contributions to the University of Oregon (a qu

1.
During the current year, Ralph made the following
contributions to the University of Oregon (a qualified charitable
organization):

Cash $63,000
Stock in Raptor, Inc.
(a publicly traded corporation) 94,500

Ralph acquired the
stock in Raptor, Inc., as an investment fourteen months ago at a cost of
$42,000. Ralph’s AGI for the year is $189,000. What is Ralph’s charitable
contribution deduction for the current year?
a. $56,700.
b.
$63,000.
c.
$94,500.
d.
$157,500.
e. None of the above.

2.
Pat died this year. Before she died, Pat gave 5,000 shares
of stock in Coyote Corporation (a publicly traded corporation) to her church (a
qualified charitable organization). The stock was worth $180,000 and she had
acquired it as an investment four years ago at a cost of $150,000. In the year
of her death, Pat had AGI of $300,000. In completing her final income tax
return, how much of the charitable contribution should Pat’s executor deduct?
a. $90,000.
b. $150,000.
c. $180,000.
d. $210,000.
e. None of the above.

3.
Which of the following items would be an itemized deduction
on Schedule A of Form 1040 not subject to
the 2%- of-AGI floor?
a.
Professional dues paid by an accountant (employed by Ford
Motor Co.) to the National Association of Accountants.
b.
Gambling losses to the extent of gambling winnings.
c.
Job hunting costs.
d.
Appraisal fee paid to a valuation expert to determine the
fair market value of art work donated to a qualified museum.
e.
None of the above.

4.
Paul, a calendar year married taxpayer, files a joint return
for 2014. Information for 2014 includes the following:

AGI

$175,000

State income taxes

13,500

State sales tax

3,000

Real estate taxes

18,900

Gambling losses
(gambling gains were $12,000)

6,800

Paul’s allowable itemized deductions for 2014 are:

a. $13,500.

b. $32,400.

c. $39,200.

d. $42,200.

e. None of the
above.

5.
Marilyn, age 38, is employed as an architect. For calendar
year 2014, she had AGI of $204,000 and paid the following medical expenses:

Medical
insurance premiums $ 7,800
Doctor
bills for Peter and Esther (Marilyn’s parents) 7,300
Doctor
and dentist bills for Marilyn 11,100
Prescription
medicines for Marilyn 750
Nonprescription
insulin for Marilyn 950

Peter and Esther
would qualify as Marilyn’s dependents except that they file a joint return.
Marilyn’s medical insurance policy does not cover them. Marilyn filed a claim
for reimbursement of $6,000 of her own expenses with her insurance company in
December 2014 and received the reimbursement in January 2015. What is Marilyn’s
maximum allowable medical expense deduction for 2014?

6.
Aaron, age 45, had AGI of $40,000 for 2014. He was injured
in a skiing accident and paid $3,600 for hospital expenses and $1,400 for
doctor bills. Aaron also incurred medical expenses of $1,200 for his child, who
lives with his former wife and is claimed as a dependent by her. In 2015, Aaron
was reimbursed $1,300 by his insurance company for the medical expenses
attributable to the skiing accident.

a.
Compute Aaron’s deduction for medical expenses in 2014.

b.
Assume that Aaron would have elected to itemize his
deductions even if he had no medical expenses in 2014. How much, if any, of the
$1,300 reimbursement must be included in gross income in 2015?

c.
Assume that Aaron’s other itemized deductions in 2014 were
$7,000 and that he filed as a head of household. How much of the $1,300
reimbursement must he include in gross income in 2015?

 

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