Chapter 10: True/False ACC 4301

Question 1

The term "medicine and drugs" does not include toothpaste, shaving lotion, deodorants, and hand lotions.

True

False

Question 2

Cosmetic surgery could never qualify as a deductible medical expense.

True

False

Question 3

The investment interest expense deduction is limited to net investment income.

True

False

Question 4

The term "medical care expenditure" is broadly defined in the IRC and would include expenses to improve general well being, that are not related to a particular ailment.

True

False

Question 5

Real property taxes are apportioned between the buyer and seller based on the number of days each held the property.

True

False

Question 6

Cash contributions to needy individuals are deductible charitable contributions.

True

False

Question 7

Interest on a principal residence mortgage is not deductible.

True

False

Question 8

Estate and gift taxes are deductible for income tax purposes.

True

False

Question 9

A capital improvement, such as a swimming pool at one's personal residence that would otherwise qualify as a medical expenditure, is fully deductible.

True

False

Question 10

For tax purposes, the total amount of charitable contributions is deductible in the year the payment is made.

True

False

Question 11

Property donated to a charity is generally valued at fair market value at the time of the gift.

True

False

Question 12

For personal property taxes to be deductible, they must be ad valorem, that is, assessed in relation to the value of the property.

True

False

Question 13

A taxpayer may deduct medical expenses paid for the medical care of the taxpayer, the taxpayer's spouse, and dependents.

True

False

Question 14

Personal interest is not deductible by taxpayers.

True

False

Question 15

State income taxes are always deducted on the accrual method.

True

False

Question 16

The cost of special schools for the mentally or physically handicapped may be deductible as a medical expense.

True

False

Question 17

1.

In 2015, Mary drove 2,000 miles to and from a qualified charitable hospital where she is a volunteer worker and 1,000 miles to attend her church on Sunday. Mary's charitable deduction for mileage is $420.

True

False

Question 18

If a taxpayer is reimbursed for medical expenses that were paid in a previous year, he or she must always include that amount in income in the year of reimbursement.

True

False

Question 19

1.

For other than self-employed taxpayers, 100 percent of medical insurance premiums are subject to the 10 percent (7.5 percent for taxpayers age 65 and older until 2017) of adjusted gross income floor.

True

False

Question 20

Points paid by the seller on the sale of a personal residence are treated as a reduction in the sales price and are deductible by the purchaser of the house.

True

False

Question 21

1.

In 2015, Robert drives 625 miles to obtain medical care for himself and his family. His deduction (before any limits) for medical mileage is $113.

True

False

Question 22

Real property taxes include taxes assessed for local benefits such as new streets and sidewalks.

True

False

Question 23

Interest paid on a home equity line may be deducted only if the loan proceeds are used on home improvement projects.

True

False

Question 24

Charitable contributions made in any one year that are in excess of the appropriate limitation may be carried over for up to four years.

True

False

Question 25

State and local income taxes are deductible for Federal tax purposes.

True

False

Question 26

The interest deduction is always a deduction for adjusted gross income.

True

False

Question 27

Nursing home expenditures are always deductible as medical expenses.

True

False