Question

1. Kenneth has an adjusted gross income of $114000. His Schedule A expenses were as follows:

•		Interest on home mortgage, $12500
•		Property taxes on home, $4000
•		State income tax, $8000
•		Charitable contributions, $1000

What will he be able to claim for total itemized deductions?

A) $23500

B) He should take the standard deduction.

C) $13500

D) $25500

2. Nicole sold shares of Disney Company that were given to her 20 years ago by her grandmother to pay for her down-payment on her new home. She has a 22% marginal tax rate and a 17.0% average tax rate. How much tax will she pay on her $70000 gain in the stock?

A) 15%

B) 0%

C) 22%

D) 17.0%

3. Matthew, age 65, withdraws $14400 for retirement from his Roth IRA this year. How much will he owe in taxes if his current marginal tax rate is 12% and his average tax rate is 9%?

A) $432

B) $0

C) $1728

D) $1296

5. Sam itemizes deductions, has a 16% average tax rate, and pays a 24% marginal tax rate. What is his cost of a $3500 charitable donation?

A) $2940

B) $2660

C) $3500

D) $0

Answer 1

Dear student,

As per the HOMEWORKLIB POLICY, only the first MCQ should be answered. Kindly take note of it.

Question 1

Answer is option A

A) $23500

All four items will be included in the itemized deduction. However, the maximum deduction limit for all taxes is $10000.

Interest on home mortgage, $12500

Property taxes on home + state income tax $10000

Charitable contributions, $1000

Thus, total itemized deduction = $23500

Kenneth is a single taxpayer and standard deduction for single taxpayer is $12400 in 2020. As the itemized deduction is greater than standard deduction, the itemized deduction should be opted for.