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Mary and George are both employed by H.T. Forest & Co. Her salary was $35,000 and his was $30,000. During the year they made the following interest payments: mortgage $8,000, car loan $2,000, home equity loan (proceeds used for personal debt consolidation) $3,000, and interest on margin account $4,000. In addition to their salaries, they had interest income of $1,500 and ordinary dividend income of $1,000. What is the amount that Mary and George will be able to deduct on Schedule A?
Mary and George are both employed by H.T. Forest & Co. Her salary was $35,000 and his was $30,000. During the year they made the following interest payments: mortgage $8,000, car loan $2,000, home equity loan (proceeds used for personal debt consolidation) $3,000, and interest on margin account $4,000. In addition to their salaries, they had interest income of $1,500 and ordinary dividend income of $1,000. What is the amount that Mary and George will be able to deduct on Schedule A?
$10,500
Which of the following expenses are not deductible as medical expenses
Which of the following expenses are not deductible as medical expenses
Joe is eligible for employer health coverage for 2023. His household income for 2023 was $33,000 and his share of premiums for self-only coverage cost $3,400. Joe decides to enroll in employer coverage. Which of the following statements is correct concerning the premium tax credit (PTC)?
Joe is eligible to claim the PTC.
Joe is not eligible to claim the PTC.
Joe is eligible to claim the PTC, but only on the amount exceeding the 9.12% of household income.
Joe is eligible to claim the PTC, but only on the amount up to the 9.12% of household income.
Joe is eligible for employer health coverage for 2023. His household income for 2023 was $33,000 and his share of premiums for self-only coverage cost $3,400. Joe decides to enroll in employer coverage. Which of the following statements is correct concerning the premium tax credit (PTC)?
Joe is eligible to claim the PTC.
Joe is not eligible to claim the PTC.
Joe is eligible to claim the PTC, but only on the amount exceeding the 9.12% of household income.
Joe is eligible to claim the PTC, but only on the amount up to the 9.12% of household income.
Pursuant to Publication 974, page 10, even if a taxpayer and other members of their tax family had the opportunity to enroll in coverage offered by the taxpayer’s employer that qualifies as minimum essential coverage (MEC), the taxpayer is considered eligible for an employer-sponsored plan (and cannot get the PTC for their coverage in a qualified health plan) only if the employer-sponsored coverage is affordable to the employee and the coverage provides minimum value. The taxpayer’s family members also may be unable to get the PTC for coverage in a qualified health plan for months they were eligible to enroll in employer-sponsored coverage, but only if it was affordable and provided minimum value for the employee.
If a taxpayer or the taxpayer’s family member(s) enrolls in the employer coverage, the individual enrolled cannot get the PTC for coverage in a qualified health plan, even if the employer coverage is not affordable or does not provide minimum value.
As a result, Joe is not eligible for PTC in a qualified health plan because he enrolled in the employer coverage.
In 2023, Jerry was required to use his car for his employer. His employer's mileage reimbursement was $0.15 per mile. Which of the following statements is correct if Jerry's actual expenses are more than the reimbursement?
In 2023, Jerry was required to use his car for his employer. His employer's mileage reimbursement was $0.15 per mile. Which of the following statements is correct if Jerry's actual expenses are more than the reimbursement?
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The standard mileage rate
The standard mileage rate
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U.S. Co. is a 25% owner of an Irish corporation. The Irish corporation reported $8,500,000 in sales and $3,500,000 in general expenses. It paid $500,000 in taxes to the Irish government (10%). The adjusted taxable bases of the Irish company’s assets are $2,000,000. Assume U.S. Co. makes an election under IRC Section 250. What is the tax liability associated with its GILTI inclusion for U.S. Co.?
U.S. Co. is a 25% owner of an Irish corporation. The Irish corporation reported $8,500,000 in sales and $3,500,000 in general expenses. It paid $500,000 in taxes to the Irish government (10%). The adjusted taxable bases of the Irish company’s assets are $2,000,000. Assume U.S. Co. makes an election under IRC Section 250. What is the tax liability associated with its GILTI inclusion for U.S. Co.?
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Study Notes
Deductible Interest Expenses
- Mary and George can deduct the following interest expenses on Schedule A:
- Mortgage interest: $8,000
- Car loan interest: $2,000
- Home equity loan interest: $3,000
- The interest on the margin account is not deductible.
- Interest expenses are limited to the amount of investment income.
- In this case, Mary and George have $1,500 in interest income and $1,000 in dividend income which makes a total of $2,500.
Non-Deductible Medical Expenses
- Medical expenses for cosmetic surgery are not deductible.
- Medical expenses for weight-loss programs are not deductible.
- Medical expenses for over-the-counter drugs are not deductible.
Premium Tax Credit (PTC)
- Joe is not eligible to claim the PTC.
- Individuals who are eligible for employer-sponsored health coverage are generally not eligible for the PTC.
Reimbursement For Vehicle Expenses
- Jerry can deduct the amount of his actual expenses that exceed the mileage reimbursement.
- Jerry's employer's mileage reimbursement is $0.15 per mile.
- Jerry can deduct the difference between his actual expenses and the total reimbursement received for the mileage driven.
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