1. Which of the following expenses, if any, qualify as deductible for Federal income tax purposes?...

1. Which of the following expenses, if any, qualify as deductible for Federal income tax purposes?

a.

Contribution to a Roth IRA.

b.

Contribution to a traditional IRA

c.

Contributions to a Coverdell Education Savings Account.

.

d.

Contributions to a qualified tuition program (§ 529 plan)

2. If a residence is used primarily for personal use (rented for fewer than 15 days per year), which of the following is correct?

	a.	No expenses are deductible.
	b.	No income is included in AGI.
	c.	Expenses must be allocated between rental and personal use.
	d.	Only a. and b. are correct.

Expert Solution

Q-1	(a)
	With Roth IRAs, you don’t get a tax deduction when you make a contribution, so they don’t lower your adjusted gross income that year. But, as a result, your withdrawals in retirement are generally tax-free

Q-1	(b)
	Traditional IRA contributions are tax-deductible on both state and federal tax returns for the year you make the contribution. As a result, withdrawals—officially known as distributions—are taxed at your income tax rate when you make them, presumably in retirement.

Q-1	( c)
	You may be able to contribute to a Coverdell ESA to finance the beneficiary's qualified education expenses. Contributions must be made in cash, and they're not deductible.

Q-1	(d)
	Qualified Tuition Program or QTP, allows you to prepay a student's college tuition or contribute to an education savings account. Contributions are not tax-deductible on federal returns, but distributions will be tax-free if they are used to pay for qualified education expenses for the plan beneficiary

Q-2
(b) is correct
However expenses like property taxes,interest on mortgage of personal residence can be deductible

ekkarill92 answered 2 years ago

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1. Which of the following expenses, if any, qualify as deductible for Federal income tax purposes?...

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Expert Solution

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