Local property taxes 2100 Local income taxes 1000 Total taxes 13700 John Jones

Local property taxes 2100 local income taxes 1000

  • DeVry University, Fremont
  • ACCT 553
  • Notes
  • BrigadierIronBarracuda9181
  • 18
  • 100% (4) 4 out of 4 people found this document helpful

This preview shows page 9 - 12 out of 18 pages.

Local property taxes 2,100Local income taxes1,000Total taxes$13,700John Jones incurred the following interest items for 2010: 77. Interest on qualified education loans$2,500Interest on machine used in business$1,200Interest on personal residence8,000Interest on personal credit card purchases600Interest on investments20,000He earned $3,000 in investment income from the investments. What is his itemized interest deduction? Which of the following interest expenses are deductible on a federal income tax return for 2010? 78. Interest on personal loan$4,000Interest on a car loan2,000Interest on a home mortgage9,000Interest on a home equity loan3,000Total interest expenses$18,000Carl Craft’s adjusted gross income is $80,000. He gave $8,000 cash to his church. He also donated land 79. with a fair market value of $60,000 to Cleveland State University. The land had cost Carl $30,000 in 1958. Finally, he contributed $6,000 to a private scholarship foundation to which the 20 percent limitation applies. Carl does not elect the optional reduction of the land contribution. What is Carl’s charitable contribution deduction for the year? John Jones has adjusted gross income of $50,000. During 2010, John contributed $6,000 in cash to his 80. church and stock with a fair market value of $40,000 to the girl scouts. The stock had cost John $36,000. (a.) What is John’s charitable contribution deduction for 2010? (b.) If John elects the optional reduction of the stock contribution, what would be his charitable contribution deduction for 2010?
Image of page 9
510 CCH Federal Taxation—Basic Principles Chapter 8 © 2010 CCH. All Rights Reserved. Jim Jeeves is a self-employed individual. During the 2010 tax year, his car which he used 70 percent of 81. the time for business and 30 percent for pleasure was totally destroyed in an accident. The car had a fair market value of $26,000 before the accident, which was less than the car’s adjusted basis. Jim received only $2,000 as a recovery from his insurance company. His adjusted gross income is $48,000. What is the amount of the personal casualty loss deduction that Jim can report as an itemized deduction for the year? In 2010, Larry Jones was involved in a collision which totally destroyed his car. The automobile, which 82. cost $24,000 and had a fair market value of $10,200 right before the accident, was used solely for personal use. The car had no value after the accident. Assuming that Larry had adjusted gross income of $70,000 and carried no collision insurance, what amount can he deduct as a net casualty loss for the year? In 2010, Philip Carlton’s sailboat is destroyed by high winds during a storm. The fair market value of 83. the vessel immediately before the loss is $6,000. Philip’s adjusted gross income for the year is $56,000. Compute Philip’s casualty loss for the year.
Image of page 10
511 Testbank © 2010 CCH. All Rights Reserved. Chapter 8 ANSWERS TO TRUE-FALSE QUESTIONS—CHAPTER 8 True. 1. True. 2. True. 3. False. The amounts received are not necessarily to be used to cover deductible medical expenses. 4. False. Must be prescription medicines or drugs. 5. False. Special foods or beverages taken as a substitute for food normally consumed and satisfying 6. nutritional requirements are personal nondeductible expenses. True. 7. True. 8. False. Individuals failing the dependency test because of too much income still qualify for the medical
Image of page 11
Image of page 12

You've reached the end of your free preview.

Want to read all 18 pages?

  • Fall '12
  • ANYONE
  • Taxation in the United States, fair market value

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture