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Certain miscellaneous deductions are not subject to a 2% of AGI threshold.

These deductions are shown as "Other Miscellaneous Deductions" on Schedule A. Which of these deductions is subject to the 2% of AGI threshold? 

-a. Amortizable premium on taxable bonds
- b. Repayment of more than $3,000 under a claim of right
- c. Federal estate tax on income in respect of a decedent (IRD)
- d. None of the above are subject to the 2% threshold

The TCJA changed the entertainment expense deduction. Under the terms of the TCJA, beginning with tax years starting in 2018, no deduction will be allowed with respect to all of the following EXCEPT: 

-a. an activity generally considered to be entertainment, amusement, or recreation
- b. membership dues with respect to any club organized for business, pleasure, recreation, or other social purposes
- c. a facility or portion thereof used in connection with any of the above items
- d. de minimis fringes like coffee in the breakroom

Pam, a homemaker, and Peter, a teacher, separated in May and are filing separate returns this year. Before the separation, Pam had large medical bills not covered by insurance. Peter paid the bills out of a joint checking account. They do not live in a community property state. Which is the best statement?

- a. Only Pam gets to claim the expense because it was her medical bills.
- b. They had a joint checking account so Pam can claim the entire expense.
- c. Peter can claim all of the expense but he bears the burden of proof that he paid the entire expense.
- d. Peter should claim the expense because he will get a bigger refund which he can share with Pam.

Billy-Bob has $2,400 in corporate distributions in 2019: $400 worth of postage stamps as a trust dividend, ordinary dividends of $1,000 from his stock investment in BadBoy Corporation, $500 in qualified dividends on stock he has held for 65 days of the previous 121 and $500 as return of his invested capital (he gets his money back). Which of the following is correct regarding his reporting requirements with respect to these distributions?

- a. $2,400 in income taxable at ordinary income rates; $0 as capital gain
- b. $2,000 in income taxable at ordinary income rates; $400 as capital gain
- c. $1,000 in income taxable at ordinary income rates; $1,400 as capital gain
- d. $1,000 in income taxable at capital gains rates; $900 as ordinary income

John purchased 50 acres of land for $1 million. After the purchase and sale transaction had been closed, the seller reduced the price to $800,000 and returned $200,000 to John. What is the tax result of the price reduction?

- a. John will be required to recognize $200,000 as income in the year in which the reduction occurred.
- b. John's cost basis in the land will be reduced by $200,000, but he will not be required to recognize any income.
- c. The price reduction will have no tax effect.
- d. John will be required to recognize $200,000 as income, and his cost basis will be reduced to $800,000.

Which of the following would not limit the § 199A pass-through deduction of a taxpayer whose taxable income exceeds the applicable threshold but who is otherwise eligible for the deduction? 

-a. Whether the trade or business engaged in by the taxpayer is an SSTB
- b. The amount of W-2 wages paid with respect to the trade or business
- c. The UBIA of qualified property held for use in the trade or business
- d. The taxpayer's claiming the deduction in prior years

Alternative Airlines offers its flight attendants free flights. Which of these factors might require the value of this benefit to be included in a flight attendant's taxable income?

- a. Flight attendants can bump paying passengers and take their seats (i.e., a paying passenger has to get off the plan so the flight attendant can take his or her seat)
- b. Flight attendants can fly free only on a stand-by basis
- c. Flight attendants can fly free only when there are empty seats
- d. The flights on which attendants can fly free are flights also offered for sale to paying customers

Esther received $19,000 from her money market mutual funds in the current tax year. How much of the $19,000 must she recognize as interest income? 

-a. $19,000
- b. $15,000
- c. $5,000
- d. $0

Worst Buy sells 10 TVs to Joe Smith. Their retail cash price is $10,000. Joe is to pay $510 a month for 20 months ($10 a month is interest). If Joe makes the first three of these payments in 2019, how much does Worst Buy have to include in its income to account for the interest portion? 

-a. $1,500
- b. $1,530
- c. $10,000
- d. $30

Peter's disability income plan premiums are paid through his employer's cafeteria plan to which he allocates pre-tax earnings. He became disabled and received $60,000 in disability income benefits under the plan last year. What amount must Peter include in his income as a result of his receipt of the disability income benefit payments?

- a. $0
- b. $10,000
- c. $60,000
- d. $30,000

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