Which of the following statements regarding the tax deductibility of points related to a home mortgage is correct? (See image for answers)
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Which of the following statements regarding the tax deductibility of points related to a home mortgage is correct? (See image for answers)
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- When taxpayers borrow money to acquire investments, the interest expense they pay on the loan is and the deduction is limited to the taxpayer's income for the year. expenseWhich of the following is true? a. Points paid to get a mortgage (origination points) are tax deductible while points paid to lower the interest rate are not. b. Points paid to get a mortgage (origination points) are not tax deductible while points paid to lower the interest rate are. c. Both types of points are tax deductible. d. Neither type of points is tax deductible. If the listing realtor and your realtor (you are the buyer) are the same person a. you know you are going to get a great deal b. you do not really know whose interest the realtor has at heart c. this by law cannot happen d. you only have to pay half of the realtor's commission Which of the following statement is true? a. If you put less than 20% down on a house, you have to get mortgage insurance. No matter how much you put down, if you have a mortgage, you have to get mortgage insurance. b. c. If you put more than 10% down, you do not have to get mortgage insurance. d. Mortgage insurance from the lender is…For each item listed below, indicate whether it involves a: a. permanent difference. b. temporary difference that will result in future deductible amounts (giving rise to deferred tax assets). c. temporary difference that will result in future taxable amounts (giving rise to deferred tax liabilities). 1. Rent is collected in advance from a tenant. Rent is taxable when received. 2. Warranty costs are accrued at the time of sale for accounting purposes, but are not deductible until paid for income tax purposes. 3. Interest revenue is recorded on municipal bonds. 4. Installment sales are recognized at the point of sale for accounting purposes, but when the cash is received for income tax purposes. 5. A loss contingency is expensed for accounting purposes. The…
- Briefly explain the precise difference between a refundable vs. a nonrefundable tax credit. Provide one or two examples of each category.Which of the following can be deducted as interest expense? Interest on personal debt Interest on debt from a related creditor Imputed interest on capital Interest on assessed tax delinquency ANSWER:Which of the following statements is correct? O a. A tax offset can result in a refund if it relates to franking credits. O b. Tax offsets are same as allowable deductions as both reduce assessable income. O c. Any tax offset can increase deductions. O d. Tax offsets are used to reduce your taxable income.
- Which of the following types of interest is never deductible on a schedule a itemized deductions is it interest paid on money borrowed to buy stock for a standard investment portfolio or mortgage interest paid on a second home or personal interest paid on a car loan or points paid in advance at the time of securing a mortgage for a taxpayers Main residenceWhich of the following statements regarding deductions for real property taxes is incorrect? Multiple Choice O O A taxpayer is allowed to immediately deduct property taxes as the taxpayer makes monthly mortgage payments to an escrow account held by her mortgage company. Taxpayers are not allowed to deduct payments made for setting up water and sewer services. An individual deducts real property taxes on her principal residence as a from AGI deduction. Taxpayers are not allowed to deduct payments made for repairs to neighborhood sidewalks.Which of the following accurately describes the tax implications of investing in real estate and rental properties? a) Real estate investments are not subject to taxation. b) Rental income is tax-exempt. c) Rental income is subject to taxation, and expenses related to real estate investments may be deductible. d) Rental income is taxed at a fixed rate determined by the IRS.
- The tax rate that is applied against a prepayment penalty is the ______. Group of answer choices a. Ordinary income tax rate b. Depreciation recapture tax rate c. Local property tax rate d. Capital gains tax rateWhich expenses are deductible FOR AGI? Select one: a. Loss on a sale of a personal residence and the standard deduction b. Alimony paid by payor for divorce in 2018 and student loan interest c. Deductions on a sole proprietorship and deductible part of the self-employment tax d. Property taxes on personal residence and student loan interest expenseTrue or False Points paid in connection with the purchase of a second residence may be deducted in the year paid. Answer: Points paid to refinance a mortgage on a principal residence are fully deductible in the year paid. Answer: If an employee incurs travel expenditures and is fully reimbursed by the employer, neither the reimbursement nor the deduction is reported on the employeeʹs tax return if reporting is pursuant to an accountable plan. Answer: answer all 3
