Homework: Federal Income Taxation

Federal Income Taxation HW#6
Name Course Instructor Date
CHAPTER 6 Deductions and Losses: In General
Please answer the following questions at the end of Chapter 6:3, 4, 9-11, 14, 18 & 54
3 LO.1 Classify each of the following expenditures paid in 2020 as a deduction for AGI, a deduction from AGI, or not deductible:
a. Roberto gives cash to his father as a birthday gift. Not deductible
b. Sandra gives cash to her church- Deduction from AGI (Charitable contributions are deducted from AGI and are an itemized deduction, subject to limitations)
c. Albert pays Dr. Dafashy for medical services rendered- Deduction from AGI (Medical expenses are deductible from AGI as an itemized deduction and are only deductible after exceed 7.5% of AGI)
d. Mia pays alimony to Bill- Deduction for AGI (Alimony paid is deductible for AGI.)
e. Rex, who is self-employed, contributes to his pension plan. Deduction for AGI
f. Bonita pays expenses associated with her rental property. Deduction for AGI
In accumulation to the typical deductions, the exemptions for AGI are allowable if they are more than the typical deduction. In addition, exemptions that decrease the AGI may increase the listed exemptions that are subject to the AGI floors like health expenditures as 7.5% and other listed exemptions as 2%
4 LO.1 Classify each of the following expenditures paid in 2020 as a deduction for AGI, a deduction from AGI, or not deductible:
a. Barak contributes to his H.R. 10 plan (i.e., a retirement plan for a self-employed individual). Deduction for AGI
b. Keith pays child support to his former wife, Renee, for the support of their son, Chris. Not deductible
c. Judy pays professional dues that are not reimbursed by her employer. Deduction for AGI
d. Ted pays $500 as the monthly mortgage payment on his personal residence. Of this amount, $100 represents a payment on principal and $400 represents an interest payment. Partial Deduction from AGI
e. Oni pays a moving company for moving her household goods to Detroit, where she is starting a new job. She is not reimbursed by her employer. Deduction for AGI
f. Ralph pays $6,000 of property taxes on his personal residence and $5,000 of state income taxes Partial Deduction from AGI
Above-the-line deductions that are deducted to determine the AGI include the alimony payments moving and education expenses, and the deductible portion of self-employment tax. They can also include business deductions and losses Below-the-line deductions deduction are reported on a line that comes after the AGI calculation on a return.
9. LO.1 Monique owns a building that she leases to an individual who operates a grocery store. Rent income is $10,000, and rental expenses are $6,000. On what Form 1040 schedule or schedules are the income and expenses reported?
Use Schedule E (Form 1040) to rep...