Question

Which of the following is true about the rental of real estate?
a. Depreciation and maintenance expenses for an apartment complex are deductible.
b. A vacation home is a home that is rented for 15 days or more and is used by the taxpayer for personal use for more than the greater of 14 days or 10 percent of the days it is rented for fair value during the year.
c. If a home is rented for less than 15 days a year, the rent is not taxable.
d. Repairs on rental property are deductible by the taxpayer.
e. All of the above.
2. John owns a second home in Palm Springs, CA. During the year, he rented the house for $4,000 for 30 days and used the house for 10 days during the summer. The house remained vacant during the remainder of the year. The expenses for the home included $5,000 in mortgage interest, $600 in property taxes, $900 for utilities and maintenance, and $3,500 of depreciation. What is John’s deductible rental loss, before considering the passive loss limitations?
a. $200
b. $875
c. $1,600
d. $3,500
e. $0
3. Helen, a single taxpayer, has modified adjusted gross income (before passive losses) of $140,000. During 2014, Helen’s rental house generated a loss of $15,000. Assuming Helen is actively involved in the management of the property, what is the amount of Helen’s passive loss deduction from the rental house?
a. $0
b. $5,000
c. $10,000
d. $15,000
e. None of the above
4. Which of the following is not classified as portfolio income for tax purposes?
a. Interest income on savings accounts
b. Income from real estate investments
c. Interest on taxable bonds
d. Dividend income from stock
e. None of the above
5. Which of the following types of income is passive income?
a. Net rental income from real estate limited partnership investments
b. Dividends from domestic corporations
c. Wages
d. Interest income from certificates of deposit
e. None of the above
6. Which of the following is classified as active income?
a. Salary income
b. Interest income
c. Limited partnership income
d. Dividend income
e. None of the above
7. Nancy has active modified adjusted gross income before passive losses of $75,000. She has a loss of $10,000 on a rental property she actively manages. How much of the loss is she allowed to take against the $75,000 of other income?
a. None
b. $2,500
c. $5,000
d. $10,000
8. Ned has active modified adjusted gross income before passive losses of $250,000. He has a loss of $15,000 on rental property he actively manages. How much of the loss is he allowed to take against the $250,000 of other income?
a. None
b. $10,000
c. $15,000
d. $5,000
9. Norm is a real estate professional with a real estate trade or business as defined in the tax law. He has $80,000 of business income and $40,000 of losses from actively managed real estate rentals. How much of the $40,000 in losses is he allowed to claim on his tax return?
a. $25,000
b. None
c. $40,000
d. $20,000
10. Which type of insurance is not deductible as self-employed health insurance?
a. Medical insurance
b. Disability insurance
c. Dental insurance
d. Long-term care insurance
e. Spousal medical insurance
11. Which of the following is false about the self-employed health insurance deduction?
a. The deduction cannot be claimed when a subsidized employer health insurance plan is also available.
b. The deduction cannot be claimed if the taxpayer has an overall business loss from self employment.
c. Long-term care premiums may be deducted within specified dollar limitations based on age.
d. The self-employed health insurance deduction is an itemized deduction.
e. Dental insurance is included as deductible self-employed health insurance.


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  • CreatedJuly 16, 2015
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