ACCT 3321.001 & .002 Test II-Spring 2011

ACCT 3321.001 & .002 Test II-Spring 2011 - ACCT...

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ACCT 3321 – Federal Income Tax 1 Test II Spring 2011 INSTRUCTOR: Dr. Valrie Chambers NAME __________________________ 1. Bruce is employed as an executive and his wife, Marie, is a self-employed realtor. Besides Bruce's salary, Bruce and Marie own a warehouse that they rent to a local business for storage. This year they paid $1,250 for electric service in the warehouse. Marie also paid self-employment tax of $6,200 and Bruce had $7,000 of Social Security taxes withheld from his pay. Marie paid $45 fee to rent a safe deposit box to store records associated with her realty operation. Which of the following is a true statement? A. One-half of the social security tax is deductible for AGI. B. Only the electric bill is deductible for AGI. C. The self-employment tax is not deductible. D. The safe deposit fee and the electric bill are deductible for AGI. 2. Casey currently commutes 35 miles to work in the city. He is considering a new assignment in the suburbs on the other side of the city that would increase his commute considerably. He would like to accept the assignment, but he thinks it might require that he move to the other side of the city. Which of the following is a true statement? A. Casey can deduct moving expenses if the distance between his current residence and his new assignment is at least 50 miles. B. If Casey's move qualifies for the moving expense deduction, he can deduct the cost of meals while en route to his new residence. C. To qualify for a moving expense deduction the new commute from Casey's current residence would need to be a minimum of 85 miles. D. If Casey's move qualifies for the moving expense deduction, he can deduct half the cost of meals while en route to his new residence. 3. Hector is a married self-employed taxpayer, and this year he paid $3,000 for his health insurance premiums. Under which of the following alternative conditions can Hector deduct the cost of the premiums for AGI? A. Hector chose not to participate in the employer-sponsored plan of his spouse. B. Hector's spouse participates in an employer-sponsored plan but Hector is not eligible to participate in this plan. C. Neither Hector nor his spouse participates in an employer-sponsored plan although both are eligible to participate in a plan. D. Hector can deduct the health insurance premiums regardless of the insurance status of his spouse.
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4. Which of the following costs are deductible as an itemized medical expense? A. The cost of over-the-counter drugs. B. Medical expenses incurred to prevent disease. C. The cost of elective cosmetic surgery. D. Medical expenses reimbursed by health insurance. 5. Which of the following taxes will not qualify as an itemized deduction? A. Personal property taxes assessed on the value of specific property.
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ACCT 3321.001 & .002 Test II-Spring 2011 - ACCT...

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