chapter 7

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37. dan lives in duncan, a small town in arizona. because of a rare blood disease, dan is required to take special medical treatments once a month. the closest place these treatments are available to dan is in phoenix, 200 miles away. the treatments are provided on an outpatient basis but require him to stay overnight in phoenix. during the year, dan makes 12 trips to phoenix by automobile to receive the treatments. the motel he always stays in charges $85 per night. for the year, dan also spends a total of $250 for meals on these trips. $100 of this $250 is spent while en route to phoenix. what is the amount of dan's qualified medical expenses for 2009?
40. joyce is single, cash-method taxpayer. on april 11, 2008, joyce paid $120 with her 2007 state income tax return. during 2008, joyce had $1,600 in state income taxes withheld. on april 13, 2009, joyce paid $200 with her 2008 state tax return. during 2009, she had $2,100 in state income taxes withheld from her paycheck. upon filing her 2009 tax return on april 15, 2010, she received a refund of $450 for excess state income taxes witheld. joyce had total agi in 2009 and 2010 of $51,000 and $53,000, respectively. in 2009, joyce also paid $3,500 in qualified residence interest.
a. what is the amount of state income taxes joyce may include as an itemized deduction for 2008?
b. what is the allowed itemized deduction for state income taxes for 2009?
c. what is her taxable income for 2009?
d. what is her agi for 2010?
44. on january 1 of the current year, scott borrows $80,000 , pledging the assets of his business as collateral. he immediately deposits the money in an interest-bearing checking account. scott already had $20,000 in this account. on april 1, scott invests $75,000 in a limited real estate partnership. on july 1, he buys a new ski boat for $12,000. on august 1, he makes a $10,000 capital contribution to his unincorporated business. scott repays $50,000 of the loan on november 30 of the current year. classify scott's interest expense for the year.
47. several years ago, magdelena purchased a new residence for $300,000. currently, the outstanding mortgage on the residence is $260,000. the current fair market value of the home is $330,000. magdelena wants to borrow a sizable sum of money to pay for the college education costs of her two children and believes the interest would be deductible if she takes out a home equity loan. for each of the independent situations below, determine the amount of the loan on which magdelena may deduct the interest as qualified residence interest.
a. magdelena borrows $50,000 as a home equity loan.
b. magdelena borrows $80,000 as a home equity loan.
c. alternatively, assume the current fair market value of her residence is $375,000 and she borrows $110,000 as a home equity loan.
d. alternatively, assume the current outstanding balance of the mortgage magdelena incurred to purchase the home is $1,200,000, the home's fair market value is $1,400,000, and she borrows $80,000 as a home equity loan.
50. during 2009, doug incurs the following deductible expenses: $2,300 in state income taxes, $2,000 in local property taxes, $800 in medical expenses, and $1,500 in charitable contributions. he is single, has no dependents, and has $35,000 agi for the year. what is the amount of doug's taxable income?
54. in each of the following independent cases, determine the amount of the charitable contribution and the limitation that would apply. in each case, assume that the donee is a qualified public charity.
a. sharon donates a tract of land to a charitable organization. she has held the land for seven years. her basis in the land is $10,000 and its fmv is $40,000.
b. assume the same facts in part a, except that sharon has held the land for only 11 months and that its fmv is $23,000.
c. jack purchases a historical document for $50,000. he donates the historical document to a charitable organization two years later. the organization plans to use it for research and study. it's fmv is $23,000.
d. assume the same facts in part c, except that the organization plans to sell the document and put the money into an endowment fund.
e. valerie donates some inventory to a charitable organization. the inventory is not food or clothing. the inventory is purchased for $500 and its fmv is $1,200 at the time of the donation. she held the inventory for seven months.
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