Tax_Planning_Quiz_2 - Tax Planning Second quiz Chapters...

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Tax Planning Second quiz Chapters 6,7,9 and 10 of the Individuals Section 1) The definition of medical care includes preventative measures such as routine physical examinations. (T) 2) Due to stress on the job, taxpayer Charlie began to experience chest pains. In order to relax and relieve the pains, he and his spouse went on an ocean cruise. The cost of the cruise to alleviate this medical condition is tax deductible. (F) 3) In the current year, Drew paid $6,500 for a piece of equipment to be used in his business. In addition, he had to pay a state sales tax of $500 on the purchase. How should Drew handle the sales tax? a. As an itemized deduction on Schedule A. b. As a tax expense deduction on Schedule C. c. Add the tax to the basis of the equipment. d. Disregard sales tax as it is no longer deductible. 4) In the current year, Julia earns $9,000 in net investment income and incurs $14,000 of investment interest expense. What is the amount of investment interest expense deductible this year? a. $0 b. $3,000 deductible this year; $11,000 carried forward to next year c. $9,000 deductible this year; $5,000 carried forward to next year d. $14,000 deductible this year; nothing to be carried forward to next year 5) Leo spent $6,600 to construct an entrance ramp and to widen doorways in his personal residence to make the home accessible for his wife, who is disabled and confined to a wheelchair. The $6,600 expenditure increased the value of the residence by $2,000. How much of the $6,600 is a deductible medical expense? a.
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Tax_Planning_Quiz_2 - Tax Planning Second quiz Chapters...

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