【導(dǎo)讀】10-1. CHAPTER10. Status:Q/P. TRUEORFALSE. improvement. byemployer. futureyear. Status:Q/P. defined. defined. tax-exemptbonds. limitations. property

　　

【正文】 nalytic MSC: 2 min 31. A taxpayer pays points to obtain financing to purchase a rental house. At the election of the taxpayer, the points can be deducted as interest expense for the year paid. ANS: F The special rule for the expensing of points only applies when a personal residence is involved (., the taxpayer’s principal residence). PTS: 1 DIF: 1 REF: p. 1017 OBJ: 5 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 32. If certain conditions are met, a buyer may deduct sellerpaid points in the tax year in which they are paid. ANS: T PTS: 1 DIF: 1 REF: p. 1017 OBJ: 5 NAT: AICPA FNReporting | AACSB Analytic MSC: 2 min 33. Jack sold a personal residence to Steven and paid points of $3,500 on the loan to help Steven finance the purchase. Jack can deduct the points as interest. ANS: F Points paid by the seller of a personal residence are deductible as interest by the buyer (., Steven). Such amounts reduce the seller’s (Jack’s) amount realized. PTS: 1 DIF: 1 REF: p. 1017 OBJ: 5 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 1012 2020 Comprehensive Volume/Test Bank 34. Letha incurred a $1,600 prepayment penalty to a lending institution because she paid off the mortgage on her home early. The $1,600 is deductible as interest expense. ANS: T Prepayment penalties are considered to be deductible interest. PTS: 1 DIF: 1 REF: p. 1017 | p. 1018 OBJ: 5 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 35. Leona borrows $100,000 from First National Bank and uses the proceeds to purchase City of Houston bonds. The interest Leona pays on this loan is deductible as investment interest subject to the investment interest limits. ANS: F Interest incurred to purchase or carry taxexempt bonds is not deductible. PTS: 1 DIF: 1 REF: p. 1016 OBJ: 5 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 36. Tony, a cash basis taxpayer, took out a 12month business loan on December 1, 2020. He prepaid all $4,200 of the interest on the loan on December 1, 2020. Tony can deduct all $4,200 of the prepaid interest in 2020. ANS: F Cash basis taxpayers are required to allocate prepaid interest to the tax years to which the interest relates. Therefore, Tony can deduct only $350 ($4,200/12) in 2020 and the other $3,850 in 2020. PTS: 1 DIF: 1 REF: p. 1018 OBJ: 5 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 37. Sadie mailed a check for $2,200 to a qualified charitable anization on December 31, 2020. The $2,200 contribution is deductible on Sadie’s 2020 tax return. ANS: T The mailing date is treated as the date of the charitable contribution. PTS: 1 DIF: 1 REF: p. 1022 OBJ: 6 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 38. On December 23, 2020, Megan used her credit card to make a $750 contribution to the United Way, a qualified charitable anization. She will pay her credit card balance in January 2020. If Megan itemizes, she cannot deduct the $750 in 2020. ANS: F The date the charge is made on a credit card determines the year of deduction. PTS: 1 DIF: 1 REF: p. 1022 OBJ: 6 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min Deductions and Losses: Certain Itemized Deductions 1013 39. Judy paid $40 for Girl Scout cookies and $40 for Boy Scout popcorn. Judy may claim an $80 charitable contribution deduction. ANS: F The deduction is limited to the excess of the amount paid over the value of the benefit received (., the cookies and popcorn). PTS: 1 DIF: 1 REF: p. 1020 OBJ: 6 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 40. For all of the current year, Randy (a calendar year taxpayer) allowed the Salvation Army to use a building he owns rentfree. The building normally rents for $24,000 a year. Randy will be allowed a charitable contribution deduction this year of $24,000. ANS: F The rentfree use of building space is not deductible as a charitable contribution. PTS: 1 DIF: 1 REF: p. 1021 OBJ: 6 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 41. Bjorn contributed a sculpture to the Norwegian Art Museum of Oslo, Norway. The sculpture, purchased six years ago, was worth $50,000 when donated, and Bjorn’s basis was $10,000. If this sculpture is retained and displayed by the museum, Bjorn’s charitable contribution deduction is $50,000 (subject to percentage limitations). ANS: F The property was not contributed to a qualified domestic (.) charitable anization. Bjorn is not allowed a deduction for the contribution to the foreign charity. PTS: 1 DIF: 1 REF: p. 1021 | p. 1023 OBJ: 6 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 42. During the year, Victor spent $300 on bingo games sponsored by his church. If all profits went to the church, Victor has a charitable contribution deduction of $300. ANS: F Costs of raffles, bingo, or lottery tickets do not qualify for the charitable deduction regardless of who receives the profits. PTS: 1 DIF: 1 REF: p. 1021 OBJ: 6 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 2 min 43. Martha drove 200 miles to volunteer in a project sponsored by a qualified charitable anization. In addition, she spent $150 for meals while away from home. She may take a charitable contribution deduction of $178 [$150 + (200 miles ? $)]. 1014 2020 Comprehensive Volume/Test Bank ANS: T Transportation for charitable purposes is deductible at 14 cents per mile. The cost of meals is deductible because they were incurred while the taxpayer was away from home. Therefore, Martha’s deduction is $178 [$150 + (200 miles ? $ per mile)]. PTS: 1 DIF: 1 REF: p. 1021 OBJ: 6 NAT: AICPA FNMeasurement | AACSB Analytic MSC: 5 min 44. During the year, Eve (a resident of Billings, Montana) spends three consecutive weeks in Lo