Question

 

7) Gerald, a physically handicapped individual, pays $9,000 for the installation of wheelchair ramps,

support bars, and railings in his personal residence. These improvements increase the value of his

personal residence by $2,000. Only $7,000 of the expenditure qualifies as a medical deduction.

8) Points paid on the loan for the purchase of a new home are not deductible on an

individual's tax return.

9) Warren sold his personal residence to Alicia on July I, 2008. He had paid $4,200 in real property

taxes on March l, 2008, the due date for property taxes for 2008. Warren must increase the

amount realized for his property by the portion of the $4,200 allocable to Alicia.

10) In April 2008, Bertie, a calendar year cash basis taxpayer, had to pay the state of Michigan

additional income tax for 2007. Even though it relates to 2007, for Federal income tax purposes

the payment qualifies as a tax deduction for tax year 2008.

Answer 1

7. FALSE

The full $9,000 included as a medical expense under the special provisions for physically handicapped persons.

8. FALSE

The points paid on the loan on the purchase of new house are deductable on individual's tax return.

9. FALSE

The real property taxes are apportioned between warren(seller) and Alicia(buyer) on the basis of no of days the property is held by each during the real property tax paid year. Warren who paid all of the tax for the year, must reduce the amount realized by the portion of the taxes allocable to Alicia.

10. TRUE

The amount is deductable in 2008, because Bertie is cash basis taxpayer.