Mega sample questions - Chapter 10
Indicate whether the statement is true or false.
The election to itemize is appropriate when the taxpayer’s allowable itemized deductions exceed the
allowable standard deduction.
Erica, Carol’s daughter, has a mild form of autism.
Dr. Malone recommends that Carol send Erica to a
special school for autistic children when she enters first grade.
Erica may include the cost of tuition, meals,
and lodging for the special school when computing her medical expense deduction.
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.
George, a sculptor, has an elevator installed in his house to transport heavy materials to his loft studio because
he is concerned that he might strain his back by lifting heavy objects.
George may deduct the full cost of the
elevator as a medical expense.
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 because he is not a dependent.
Ed paid $1,660 of medical expenses for his son Mark.
Mark is married to Judy and they file a joint return.
Ed cannot include the $1,660 when calculating his medical expense deduction.
Walter traveled to another city to obtain specialized outpatient medical care not available in his hometown.
His sister accompanied him because he was too ill to travel alone.
He may include the cost of his airfare and
lodging (up to $50 per night for himself and up to $50 per night for his sister) in determining his medical
Barbara, who is self-employed, paid $3,600 for medical insurance coverage.
She can include 100% of the
$3,600 when calculating her itemized medical expense deduction.
Stewart, a calendar year taxpayer, pays $6,000 in medical expenses in 2010.
Even if he expects $3,000 of
these expenses to be reimbursed by an insurance company in 2011, Stewart can include all $6,000 of the
expenses in determining his medical expense deduction for 2010.
Georgia contributed $2,000 to a qualifying Health Savings Account in 2010. The entire amount qualifies as a
medical expense and is potentially deductible as an itemized deduction.
Fees for automobile inspections, automobile titles and registration, bridge and highway tolls, parking meter
deposits, and postage are
deductible if incurred for personal reasons, but they are deductible as deductions
AGI if incurred as a business expense by a self-employed taxpayer.