. TRUE/ FALSE? 1. Rom pays the medical expenses of his son, Hudy. Hudy would qua

Question

. TRUE/ FALSE?

1. Rom pays the medical expenses of his son, Hudy. Hudy would qualify as Rom’s dependent except that he earns $11,000 during the year. Rom may claim Hudy’ medical expenses.

_ 2.   For purposes of computing the deduction for qualified residence interest, a qualified residence includes only the taxpayer’s principal residence.

__ 3.   Hal paid $180 for Cub Scout candy and $70 for Girl Scout cookies. Sal may claim an $250 charitable contribution deduction.

_ 4.   In 2016, Aly drove 700 miles to volunteer in a project sponsored by a qualified charitable organization in Ohio. Aly may take a charitable contribution deduction of $204.

__ 5.   James participates 106 hours in an activity, while an employee participates 7 hours. Tim has materially participated in the activity.

____     6.   Wall owns a   building that produces a $24,000 loss during the year. His AGI before considering the rental loss is $84,000. Wall must be an material participant with respect to the rental activity in order to deduct the $24,000 loss under the real estate rental exception.

____     7.   In deciding to enact the alternative minimum tax, Congress was concerned about the inequity that resulted when taxpayers with substantial economic incomes could avoid paying regular income tax.

____     8.   The tax benefit received from a tax credit is affected by the tax rate of the taxpayer.

____     9.   Nonrefundable credits are those that reduce the taxpayer’s tax liability but are not paid when the amount of the credit (or credits) exceeds the taxpayer’s tax liability.

____   10.   Qualified rehabilitation expenditures include the cost of acquiring the building, but not the cost of acquiring the land.

____     11.       Employers are encouraged by the work opportunity tax credit to hire individuals who have been long-term recipients of family assistance welfare benefits

Explanation / Answer

1. True

2. False

3. False.

4. True

5 True

6 True

7 True

8 True

9 False

10 True

11 False

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