305FINAL - University of Wisconsin Parkside School of...

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University of Wisconsin Parkside School of Business and Technology Dr. R. Zameeruddin INDIVIDUAL TAXATION, ACCT 305 CORRECT FINAL EXAM Name _______________________
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MULTIPLE CHOICE: CHAPTER 10 1. Roger is employed as an actuary. For calendar year 2007, he had AGI of $130,000 and paid the following medical expenses: Medical insurance premiums $5,300 Doctor and dentist bills for Derrick and Jane (Roger’s parents) 7,900 Doctor and dentist bills for Roger 5,100 Prescribed medicines for Roger 830 Nonprescribed insulin for Roger 960 Derrick and Jane would qualify as Roger’s dependents except that they file a joint return. Roger’s medical insurance policy does not cover them. Roger filed a claim for $4,800 of his own expenses with his insurance company in November 2007 and received the reimbursement in January 2008. What is Roger’s maximum allowable medical expense deduction for 2007? a. $9,750. b. $10,340. c. $19,130. d. $20,090. e. None of the above. 2. Tom is advised by his family physician that he needs back surgery to correct a problem from his last back surgery. Since Tom is in a wheel chair, he needs his wife, Jean, to accompany him on his trip to Rochester, Minnesota, for in-patient treatment at the Mayo Clinic which specializes in this type of surgery. Tom incurred the following costs: Round-trip airfare ($350 each) $ 700 Jean’s hotel in Rochester for four nights ($95 per night) 380 Jean’s meals while in Rochester 105 Tom’s medical treatment 3,500 Tom’s prescription medicine 600 Compute Tom’s medical expenses for the trip (subject to the 7.5% floor). a. $4,000. b. $5,000. c. $5,180. d. $5,285. e. None of the above. 3. During 2007, Nancy paid the following taxes: Taxes on residence (for the period from March 1 through August 31, 2007) $5,250 State motor vehicle tax (based on the value of the personal use automobile) 430 State sales tax 3,500 State income tax 3,050 2
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Nancy sold her personal residence on June 30, 2007, under an agreement in which the real estate taxes were not prorated between the buyer and the seller. What amount qualifies as a deduction from AGI for 2007 for Nancy? a. $9,180. b. $9,130. c. $7,382. d. $5,382. e. None of the above. 4. In Lawrence County, the real property tax year is the calendar year. The real property tax becomes a personal liability of the owner of real property on January 1 in the current real property tax year, 2007 (which is not a leap year). The tax is payable on June 1, 2007. On May 1, 2007, Reggie sells his house to Dana for $250,000. On June 1, 2007, Dana pays the entire real estate tax of $7,950 for the year ending December 31, 2007. How much of the property taxes may Reggie deduct? a. $0. b. $2,614. c.
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This note was uploaded on 12/04/2010 for the course ACCT 3200 taught by Professor Martin during the Fall '08 term at Kennesaw.

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305FINAL - University of Wisconsin Parkside School of...

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