Question

Which of the following statements is false? Taxes paid by a husband on a home owned by his wife are not deductible by the husband on the husband's separate tax return. Special assessments paid to improve streets, sidewalks, and other like improvements are not deductible as real estate taxes even though they are assessed by a county or municipality for the public welfare. If a taxpayer's mortgage requires his real estate taxes to be "escrowed," or included in the taxpayer's mortgage payment, the taxes are deductible and deemed paid when the taxpayer pays his mortgage payment. Annual assessments paid to homeowner associations to maintain common areas are not deductible as real estate taxes.

Which of the following statements is true?                                                                                                                                                                          A taxpayer may not deduct a late charge or penalty assessed by a lender when the fee or penalty is for specific services performed by the lender. Prepayment penalties charged by a lender for paying off a mortgage earlier than its stated term are not deductible as home mortgage interest. Losses to a taxpayer's residence due to fire, theft, and other casualty are not deductible unless the home is used for business purposes. Losses to a taxpayer's residence resulting from deterioration over a period of time are deductible as casualty losses subject to certain dollar limitations.

Which of the following is NOT a requirement to deduct a casualty loss on a taxpayer's residence? The portion of the loss that is deducted must be uninsured (policy deductible) or unreimbursed by the insurance company. For some years, only net losses exceeding ten percent of the taxpayer's adjusted gross income are tax deductible. For tax years after 2018, in addition to the 10% adjusted gross income limitation, the first $500.00 of each casualty loss event is not allowed as a deduction similar to a "deductible" clause in an insurance policy. For some years, generally, for a loss to be deductible as a casualty, the loss must result from a sudden unexpected event except for losses due to corrosive drywall. A taxpayer, in 2018, may claim a personal casualty loss not attributable to federally declared disasters if it is to offset a personal casualty gain.

Answer 1