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Why is the distinction between deductions for AGI and deductions
from AGI important for individuals?
6-13
Michelle pays a CPA $400 for the preparation of her federal income
tax return. Michelle’s only sources of income are her salary from
employment and interest and dividends from her investments.
·
a.Is this a deductible expense? If so, is it a deduction for or from
AGI?
·
b.Assume the same facts as in Part a except that in addition to
her salary and investment and dividend income, Michelle also owns a
small business. Of the $400 fee paid to the CPA, $250 is for the
preparation of her Schedule C (Profit or Loss from Business). How
much, if any, of the $400 is a deductible expense? Identify it as either
for or from AGI.
6-20
Why did Congress enact the wash sale provisions?
7-31
Wayne and Maria file a joint tax return on which they itemize their
deductions and report AGI of $50,000. During the year they incurred
$1,500 of medical expenses when Maria broke her leg. Furthermore,
their dentist informed them that their daughter, Alicia, needs $3,000 of
orthodontic work to correct her overbite. Wayne also needs a new pair
of eyeglasses that will cost $300. What tax issues should Wayne and
Maria consider?
I:7-32
This year, Chuck took out a loan to purchase some raw land for
investment. He paid $40,000 for the land, and he expects that within 5