CHAPTER 10 DEDUCTIONS AND LOSSES: CERTAIN ITEMIZED DEDUCTIONS

1. Personal expenditures
that are deductible as itemized deductions include medical expenses, Federal
income taxes, state income taxes, property taxes on a personal residence,
mortgage interest, and charitable contributions.
a. True
b. False

2. The election to itemize
is appropriate when total itemized deductions are less than the standard
deduction based on the taxpayer’s filing status.
a. True
b. False

3. Adrienne sustained
serious facial injuries in a motorcycle accident. To restore her physical
appearance, Adrienne had cosmetic surgery. She cannot deduct the cost of this
procedure as a medical expense.
a. True
b. False

4. A physician
recommends a private school for Ellen’s dependent child. Because of the
physician’s recommendation, the cost of the private school will qualify as a
medical expense deduction (subject to percentage limitations).
a. True
b. False

5. Mindy paid an
appraiser to determine how much a capital improvement made for medical reasons
increased the value of her personal residence. The appraisal fee qualifies as a
deductible medical expense.
a. True
b. False

6. Upon the
recommendation of a physician, Ed has a swimming pool installed at his
residence because of a heart condition. If he is allowed to deduct all or part
of the cost of the pool, Ed’s increase in utility bills due to the operation of
the pool qualifies as a medical expense.
a. True
b. False

.

7. Mason, age 70, a
physically handicapped individual, pays $10,000 in 2014 for the installation of
wheelchair ramps, support bars, and railings in his personal residence. These
improvements increase the value of his personal residence by $2,000. Only
$8,000 of the expenditure qualifies as a medical deduction (subject to the AGI
floor).
a. True
b. False

8. Chad pays the medical
expenses of his son, James. James would qualify as Chad’s dependent except that
he earns $7,500 during the year. Chad may claim James’ medical expenses even if
he is not a dependent.
a. True
b. False

9. Bill paid $2,500 of
medical expenses for his daughter, Marie. Marie is married to John and they
file a joint return. Bill caninclude
the $2,500 of expenses when calculating his medical expense deduction.
a. True
b. False

10.In 2014, Dena
traveled 600 miles for specialized medical treatment that was not available in
her hometown. She paid $90 for meals during the trip, $145 for a hotel room on
Tuesday night, and $15 in parking fees. She did not keep records of other
out-of-pocket costs for transportation. Dena can include $206 in computing her
medical expenses.
a. True
b. False

11.Maria traveled to
Rochester, Minnesota, with her son, who had surgery at the Mayo Clinic. Her son
stayed at the clinic for the duration of his treatment. She paid airfare of
$300 and $50 per night for lodging. The cost of Maria’s airfare and lodging cannotbe included in determining her
medical expense deduction.
a. True
b. False

12.In 2014, Brandon, age
72, paid $3,000 for long-term care insurance premiums. He may include the
$3,000 in computing his medical expense deduction for the year.
a. True
b. False

13.Jim’s employer pays
half of the premiums on a group medical insurance plan covering all employees,
and employees pay the other half. Jim can exclude the half of the premium paid
by his employer from his gross income and may include the half he pays in
determining his medical expense deduction.
a. True
b. False

14.Matt, a calendar year
taxpayer, pays $11,000 in medical expenses in 2014. He expects $5,000 of these
expenses to be reimbursed by an insurance company in 2015. In determining his
medical expense deduction for 2014, Matt must reduce his 2014 medical expenses
by the amount of the reimbursement he expects in 2015.
a. True
b. False

15.In 2015, Rhonda
received an insurance reimbursement for medical expenses incurred in 2014. She
is notrequired to include the
reimbursement in gross income in 2015 if she claimed the standard deduction in
2014.
a. True
b. False

16.Georgia contributed
$2,000 to a qualifying Health Savings Account in 2014. The entire amount
qualifies as an expense deductible forAGI.
a. True
b. False

17.Shirley pays FICA
(employer’s share) on the wages she pays her maid to clean and maintain
Shirley’s personal residence. The FICA payment is notdeductible as an itemized deduction.
a. True
b. False

18.Fees for automobile
inspections, automobile titles and registration, bridge and highway tolls,
parking meter deposits, and postage are not
deductible if incurred for personal reasons, but they are deductible as
deductions forAGI if incurred as a
business expense by a self-employed taxpayer.
a. True
b. False