Questions from Individual Taxation

Q: Determine whether a taxpayer who is claimed as a dependent on another

Determine whether a taxpayer who is claimed as a dependent on another return is entitled to an addition to the standard deduction for age or blindness. (Hint: Read the calculation of the standard dedu...

Q: It has been suggested that tax policy favors deductions for AGI compared

It has been suggested that tax policy favors deductions for AGI compared to itemized deductions. Describe two ways in which deductions for AGI are treated more favorably than itemized deductions.

Q: How is a business activity distinguished from an investment activity? Why

How is a business activity distinguished from an investment activity? Why is this distinction important for the purpose of calculating federal income taxes?

Q: Describe how a business element is reflected in the requirements to deduct

Describe how a business element is reflected in the requirements to deduct moving expenses and how Congress limited this deduction to substantial moves.

Q: Explain why Congress allows self-employed taxpayers to deduct the cost

Explain why Congress allows self-employed taxpayers to deduct the cost of health insurance above the line (for AGI) when employees can only itemize this cost as a medical expense. Would a self-employ...

Q: Describe the mechanical limitation on the deduction for interest on qualified educational

Describe the mechanical limitation on the deduction for interest on qualified educational loans.

Q: Explain why the medical expense and casualty loss provisions are sometimes referred

Explain why the medical expense and casualty loss provisions are sometimes referred to as “wherewithal” deductions and how this rationale is reflected in the limits on these deductions.

Q: Describe the type of medical expenditures that qualify for the medical expense

Describe the type of medical expenditures that qualify for the medical expense deduction. Does the cost of meals consumed while hospitalized qualify for the deduction? Do over-the-counter drugs and me...

Q: Simpson is a single individual who is employed full-time by

Simpson is a single individual who is employed full-time by Duff Corporation. This year Simpson reports AGI of $50,000 and has incurred the following medical expenses:...

Q: Rory and Nicholi, single taxpayers, each annually receive Social Security

Rory and Nicholi, single taxpayers, each annually receive Social Security benefits of $15,000. Rory’s taxable income from sources other than Social Security exceeds $200,000. In contrast, the Social S...