Multiple Choice Answers

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1. Mark Miller, 72, paid the following medical expenses during the year (all in excess of reimbursement): Hospital and doctor bills for liposuction(for self and wife, 50) $1840 Over the counter Medicine and drugs (for self and wife) $1730 Hospitalization for hair replacement $16,200 Over the counter Medicine and drugs (for dependent mother, age 91) $1,060 Assuming the Millers’ adjusted gross income was $100,000, how much of a medical expense deduction may the Millers claim on their joint return?
a)1770
b)2830
c)4330
d)8830
e)none

2. Nonrefundable credits
a) Will, generally, only bring tax liability to zero
b) May bring the tax liability to zero and provide the taxpayer with a form of non-taxable income from the governmental
c) May bring the tax liability to zero and provide the taxpayer with a form of taxable income from the governmental
d)are prohibited

3. In August 2011, a company bought $200K office equipment. They did not elect bonus or code section 179. At the end of 2012, what is the ending adjusted basis of the property (for tax purposes?) Answer should be formatted exactly as 80,125 no decimals, no dollar sign. rounded to the nearest dollar, only a comma, and numbers. ex. 2: 75,125 Fill in the blank _____96,000___________
Cosmetic surgery costs directed solely at improving the patient’s physical deformity are generally
a) Qualify as a medical expense deduction if performed by a licensed doctor
b) Are listed as standard deductions
c) Will not qualify for a medical expense deduction
d) Are limited to a maximum lifetime deduction of $10,000

4. Karen Baker, a cash basis calendar year taxpayer, paid the following during the year: Social security tax (withheld from wages) $6,120 Personal property taxes (ad valorem) 520 State income tax 5,000 State sales tax 3,800 Cigarette taxes 500 Fine for speeding The amount deductible on Schedule A 250
a)5520
b)9820
c)15420
d)16190
e)none

5. Miscellaneous Itemized deductions subject to the 2% floor include
a) Hobby losses, gambling losses, job seeking expenses, work clothes and uniforms, and unreimbursed employee expenses
b) Hobby losses, gambling losses, job seeking expenses, work clothes and uniforms, but not unreimbursed employee expenses
c) Hobby losses, job seeking expenses, and unreimbursed employee expenses
d)only hobby losses.