Question

Question 112.56 pts

Which of the following statements is false?

Taxes paid by a husband on a home owned by his wife are not deductible by the husband on the husband's separate tax return.

Special assessments paid to improve streets, sidewalks, and other like improvements are not deductible as real estate taxes even though they are assessed by a county or municipality for the public welfare.

If a taxpayer's mortgage requires his real estate taxes to be "escrowed," or included in the taxpayer's mortgage payment, the taxes are deductible and deemed paid when the taxpayer pays his mortgage payment.

Annual assessments paid to homeowner associations to maintain common areas are not deductible as real estate taxes.

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Question 122.56 pts

Which of the following statements is true?

A taxpayer may not deduct a late charge or penalty assessed by a lender when the fee or penalty is for specific services performed by the lender.

Prepayment penalties charged by a lender for paying off a mortgage earlier than its stated term are not deductible as home mortgage interest.

Losses to a taxpayer's residence due to fire, theft, and other casualty are not deductible unless the home is used for business purposes.

Losses to a taxpayer's residence resulting from deterioration over a period of time are deductible as casualty losses subject to certain dollar limitations.

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Question 132.56 pts

Which of the following is NOT a requirement to deduct a casualty loss on a taxpayer's residence?

The portion of the loss that is deducted must be uninsured (policy deductible) or unreimbursed by the insurance company.

For some years, only net losses exceeding ten percent of the taxpayer's adjusted gross income are tax deductible.

For tax years after 2018, in addition to the 10% adjusted gross income limitation, the first $500.00 of each casualty loss event is not allowed as a deduction similar to a "deductible" clause in an insurance policy.

For some years, generally, for a loss to be deductible as a casualty, the loss must result from a sudden unexpected event except for losses due to corrosive drywall.

A taxpayer, in 2018, may claim a personal casualty loss not attributable to federally declared disasters if it is to offset a personal casualty gain.

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Question 142.56 pts

Kate Harris had adjusted gross income in 2018 of $20,000. The following information pertains to her beach house which was destroyed by a hurricane in a federally declared disaster: Cost basis $90,000; value before the casualty $100,000; value after the hurricane $5,000; insurance recovery $85,000. Her city apartment was also broken into and a necklace with a cost of $3,000 and a value of $5,000 was stolen. She recovered $5,000 form the insurance company. What is her casualty loss deduction for 2018?

$900

$4,900

$5,000

$5,900

$7,900

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Question 152.56 pts

Karen Kurtz purchased a home for $380,000 during 2009, borrowing $300,000 of the purchase price, which was secured by a 20-year mortgage. In 2018, when the home was worth $425,000 and the balance of the first mortgage was $240,000, Karen obtained a second mortgage on the home in the amount of $130,000, using the proceeds to purchase a car and to pay off personal loans. For 2018, what amount of karen's $370,000 of mortgage debt will qualify for "qualified residence indebtedness"?

$240,000

$340,000

$370,000

$100,000

None of the above.

Answer 1