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1. In your "own" words, please describe what a "Suspended Loss"
is, how it is generated and when it is becomes deductible. (5 pts)
2. Please describe "Active Participation" as it relates to a taxpayer's
involvement in an investment in Real Estate. (5 pts).
Chapter 8
3. Macy had a lot of medical expenses this year that were not
covered by her insurance (either due to a deductible, co-insurance,
or co-pay). Her un-reimbursed qualifying medical expenses total
$8,356 and her AGI for 2013 is $45,000. Assuming she will itemize
on her 2013 tax return, how much of her medical expenses will she
be able to deduct? (5 pts)
4. Heather & Terry have a mortgage on their primary residence of
$750,000 and a mortgage on their vacation home of $410,000. In
2013, they incurred $46,400 of mortgage interest expense. How
much, if any, of that interest is deductible on Schedule A? (5 pts)
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ACCT 553 Week 4 Assignment You Decide
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Jane Smith Case
How is the $300,000 treated for purposes of federal tax income?
Jane Smith Tax Issues:
(a) What are the different tax consequences between paying down
the mortgage debt and assuming a new mortgage debt for federal
income tax purposes?