Question

7 Widening of doors and installing railings in the home of a physically handicapped individual are deemed to be medical expenses. Because this expenditure is a capital expenditure for medical care it is not subject to the 7.5% of AGI floor.

True

False

8 Interest on debt incurred for personal purposes, in general, is not deductible. Which of the following types of interest will be deductible despite the fact that they are personal in nature?

A. Interest on personal car loan.

B. The number of employees the taxpayer employs in carrying on the activity.

C. interest on acquisition indebtedness.

D. Interest on consumer debt.

9 Student loan interest is a deduction from AGI and is limited to $2,500.

True

False

10 A cash contribution of

  A. greater than $25 requires proper substantiation.

  B. any amount requires proper substantiation.

C. greater than $250 requires proper substantiation.

D. greater than $500 requires proper substantiation.  

Answer 1

7) False

For Physically Handicapped , Capital expenditure is a non deductible expenditure.So this expenditure is a capital expenditure for medical care it is subject to the 7.5% of AGI floor.

8) B. The number of employees the taxpayer employs in carrying on the activity.

This is more or less related to business so deductible.

9) True

Student loan interest is a deduction from AGI and is limited to $2,500 as per Publication 970 of IRS.

10) C. greater than $250 requires proper substantiation.

As mentione in laws a cash contribution of greater than $250 requires proper substantiation.