• Question 6
Paul, a calendar year married taxpayer, files a joint return for 2013. Information for 2013
includes the following:
AGI $175,000
State income taxes 13,500
State sales tax 3,000
Real estate taxes 18,900
Gambling losses (gambling gains were $12,000) 6,800
Paul’s allowable itemized deductions for 2013 are:
• Question 7
Pedro’s child attends a school operated by the church the family attends. Pedro made a
donation of $1,000 to the church in lieu of the normal registration fee of $200. In addition,
Pedro paid the regular tuition of $6,000 to the school. Based on this information, what is
Pedro’s charitable contribution?
• Question 8
Barry and Larry, who are brothers, are equal owners in Chickadee Corporation. On July
1, 2013, each loans the corporation $10,000 at an annual interest rate of 10%. Both
shareholders are on the cash method of accounting, while Chickadee Corporation is on the
accrual method. All parties use the calendar year for tax purposes. On June 30, 2014,
Chickadee repays the loans of $20,000 together with the specified interest of $2,000. How
much of the interest can Chickadee Corporation deduct in 2013?
• Question 9
Your friend Scotty informs you that he received a “tax-free” reimbursement in 2013 of
some medical expenses he paid in 2012. Which of the following statements best explains
why Scotty is not required to report the reimbursement in gross income?
• Question 10
Emily, who lives in Indiana, volunteered to travel to Louisiana in March to work on a
home-building project for Habitat for Humanity (a qualified charitable organization). She
was in Louisiana for three weeks. She normally makes $500 per week as a carpenter’s
assistant and plans to deduct $1,500 as a charitable contribution. In addition, she incurred
the following costs in connection with the trip: $600 for transportation, $1,200 for lodging,
and $400 for meals. What is Emily’s deduction associated with this charitable activity?
• Question 11