Question

1. Which of the following represents an amount deductible as a charitable contribution?

a. The FMV of capital gain property held over 12 months.

b. $500 cash given to a needy family in California.

c. The FMV of short-term capital gain property.

d. The adjusted basis of appreciated intangible personal property held over 12 months.

e. None of the above.

2. Medical travel expenses are deductible in 2015 at the standard mileage rate of:

a. $.14 per mile.

b. $.24 per mile.

c. $.23 per mile.

d. $.535 per mile.

e. Taxpayers must use the actual cost for transportation for medical purposes.

3. Nondeductible taxes include all of the following except:

a. social security taxes.

b. federal gift taxes.

c. the taxpayer's son's real estate taxes.

d. gasoline taxes.

e. all of the above are nondeductible taxes.

4. Which of the following is not a factor considered in determining whether an activity is a business or a hobby?

a. Locating the activity in the taxpayer's home

b. Relative amount of pleasure derived from the activity

c. Time and effort devoted to the activity

d. Extent of dependence on the activity for financial support

e. All of the above are factors considered in determining whether an activity is a business or a hobby

Answer 1

1. Option D. The adjusted basis of appreciated intangible personal property held over 12 months.

Deduction for an intangible property is its adjusted basis or FMV less any gain realised if you sold it at FMV on the date of gift.

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2. Option C. 23 cents

From January 1, 2015, the standard mileage rates will be 23 cents per mile driven for medical or moving purposes, down half a cent from 2014.

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3. Option C. The taxpayer's son's real estate taxes

Social Security taxes, gift taxes and gasoline taxes are all non deductible taxes. Taxpayer's real estate taxes are non deductible whereas that of his son aren't.

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4. Option A. Locating the activity in the taxpayer's home

Rest all others are factors considered for determining whether an activity is a business or a hobby.