Question : 51. Which of the following not deductible as an itemized deduction? a. State : 1313546

 

51. Which of the following is not deductible as an itemized deduction?

a. State income taxes

b. Personal property taxes

c. Charitable contributions

d. Local income taxes

e. All of the above may be deductible as itemized deductions

52. Jerry and Ann paid the following amounts during 2014: 

Interest on automobile loan$1,500

Interest on bank loan (proceeds were used to purchase municipal bonds)$5,000

Qualified home mortgage interest$3,000

What is the maximum amount they can use as interest expense in calculating itemized deductions for 2014?

a. $3,000

b. $3,150

c. $4,500

d. $8,000

e. None of the above

53. Matthew purchases a new principal residence in 2014 and pays points of $2,000 to obtain a mortgage loan. What is the proper tax treatment for the points paid?

a. The points are a nondeductible personal expense.

b. The points must be amortized over the life of the loan.

c. The points are fully deductible in 2014.

d. The points must be capitalized into the cost of the residence.

e. The points must be amortized over 5 years.

54. Shellie, a single individual, received her Bachelor’s degree in 2013, and took a job with a salary of $45,000 per year. In 2014, she began paying interest on qualified education loans. She was able to pay $1,500 in 2014. Which of the following statements is not correct?

a. The full $1,500 is deductible in arriving at adjusted gross income (AGI).

b. If her payment had been $3,000, only $2,500 would have been deductible in arriving at AGI and the $500 excess would have been treated as nondeductible consumer interest.

c. If her income had been $80,000, the deductible amount would have been phased out.

d. Taxpayers are not allowed a deduction for education loan interest in 2014.

55. For the year ended December 31, 2014, David, a married taxpayer filing a joint return, reported the following: 

Investment income from interest$24,000

Investment expenses other than interest$ 4,000

Interest expense on funds borrowed in 2006 to purchase investment property$70,000

What is the maximum amount that David can deduct in 2014 as investment interest expense?

a. $7,000

b. $20,000

c. $21,000

d. $24,000

e. None of the above

 

56. Amy paid the following interest expense during 2014: 

Qualified home mortgage interest$12,300

Credit card interest$ 1,000

Personal bank loan interest$ 3,000

What is the amount of Amy’s interest deduction for 2014?

a. $3,000

b. $4,000

c. $12,300

d. $16,300

e. None of the above

57. Which of the following interest expense amounts is not deductible in 2014?

a. Education loan interest of $2,000, assuming the taxpayer is single and has income of $150,000.

b. Home equity loan interest of $9,000 on a loan of $100,000, the proceeds of which were used to purchase a motor home.

c. Investment interest expense of $10,000, assuming the taxpayer has $15,000 of investment income.

d. Points of $2,000 paid on a mortgage loan for the purchase of a new principal residence.

58. During the current year, Cary and Bill incurred acquisition debt on their residence of $1,300,000 and a home equity loan of $200,000. On a joint tax return, what is the amount of their qualified acquisition debt and qualified home equity debt, respectively?

a. $900,000 and $100,000

b. $1,000,000 and $0

c. $1,000,000 and $100,000

d. $1,300,000 and $200,000

e. None of the above

59. What is the maximum amount of home equity debt (not acquisition debt) on which interest is fully deductible?

a. $0

b. $50,000

c. $100,000

d. $200,000

e. None of the above

60. Bill has a mortgage loan on his personal residence. He decides to pay 24 months of interest in advance on July 1, 2014. The total advanced interest payment is $60,000. How much of the advance interest payment can he deduct in 2014?

a. $60,000.

b. $30,000.

c. $15,000.

d. Mortgage interest is not deductible.

e. If a taxpayer makes an advance payment, he may not deduct any interest.

 

 

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