rue or Fals
Chapter7: Tax Credits
Section: Chapter Questions
Problem 6MCQ: For purposes of determining income eligibility for the premium tax credit, household AGI is AGI for...
Related questions
Question
True or False.

Transcribed Image Text:8. The Tax Table Method of computing tax liability must be used by those taxpayers who are eligible
to use that method.
9. The gross income threshold at which a taxpayer must file a tax return is met when gross income
equals or exceeds an amount equal to the taxpayer's basic standard deduction plus the
additional standard deduction for having attained age 65.
10. The income tax formula indicates that a taxpayer may simultaneously claim to both the standard
deduction and actual itemized deductions.
11. Mary, a 70 year-old, has no income and is completely supported by her six natural children. Two sint
children each contribute 8% of her support and four children each contribute 21% of her support.
All six children qualify to potentially claim Mary as a dependent under a multiple support
agreement.
12. A loss on the sale of a personal-use asset, such as an automobile, can be deducted for income tax
purposes.
13. If a security, such as a stock or bond, declines in value due to market conditions during the year, a
current tax loss/deduction in the amount of the decline in values is allowed to the
taxpayer/owner..
14. The election to itemize deductions is appropriate when total itemized deductions are less
than the standard deduction for the taxpayer's filing status.
15. Harry is a calendar year cash basis taxpayer who itemizes deductions. During 2021 he
paid the state of New York additional state income tax due to a New York's audit of his
2018 NY tax return. Ignoring any dollar limitation, the payment of the additional NY
income tax qualifies as an itemized deduction for 2021.
16. For purposes of computing the deduction for qualified residence interest, the definition of
a qualified residence includes the taxpayer's principal residence, as well as up to two
other residences of the taxpayer.
17. A taxpayer's deduction for investment interest expense for a tax year is limited to the
amount of the taxpayer's investment income for that tax year.
18. Qualified medical expenses are deductible as an itemized deduction to the extent that the
total medical expenses exceed 15% of adjusted gross income.
19. Emily volunteers 10 hours for Meals on Wheels in her spare time. At her day job as a
receptionist, she is paid $20 per hour. Emily can treat her volunteer time as a $200
charitable itemized deduction.
20. Any amount paid to a state or local government, including amounts to register an
automobile and obtain a new driver's license, are deductible as state and local taxes for
purposes of the itemized deduction for state and local taxes.
21. Self-employed taxpayers are allowed a special above-the-line duction for medical
insurance premiums paid.
Expert Solution

This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps

Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you