Module 8 – FPQP Questions and Answers
100% Solved
Which of these would be included in calculating a client's gross income?
A) Child support received
B) Lottery prize money
C) Life insurance proceeds received upon the insured's death
D) Inheritances received B) Lottery prize money
Explanation
Money from lottery prize winnings is taxable and would be included in a taxpayer's gross
income. The other options listed are generally excluded from a taxpayer's gross income.
LO 8-2
Which of these is an above-the-line deduction?
A) Deductible IRA contributions
B) State taxes paid by the individual
C) Medical expenses
,D) Gifts to charities A) Deductible IRA contributions
Explanation
Deductible IRA contributions are one of the above-the-line deductions, which generally are
subtracted from gross income to arrive at adjusted gross income The other options listed are
itemized, or below-the-line deductions.
LO 8-2
Which of the following is NOT allowed as an itemized deduction?
A) Qualified medical expenses
B) Qualified real estate taxes
C) Qualified home mortgage interest
D) Rent paid for an apartment D) Rent paid for an apartment
Explanation
Rent payments are not allowed as itemized deductions. The other options listed are allowed as
itemized deductions.
LO 8-2
, Bergen and Chris, a married couple filing jointly, are planning to buy a home in 2024. What is
the maximum mortgage amount they can have and fully deduct the mortgage interest?
A) $1.5 million
B) $2 million
C) $1 million
D) $750,000 D) $750,000
Explanation
The mortgage interest for a home purchased in 2024 is deductible for principal amounts up to
$750,000.
LO 8-2
Which of these shows the progression through the individual income tax return (Form 1040) in
the CORRECT order?
A) Adjusted gross income, gross income, standard or itemized deduction, tax credits, taxable
income
100% Solved
Which of these would be included in calculating a client's gross income?
A) Child support received
B) Lottery prize money
C) Life insurance proceeds received upon the insured's death
D) Inheritances received B) Lottery prize money
Explanation
Money from lottery prize winnings is taxable and would be included in a taxpayer's gross
income. The other options listed are generally excluded from a taxpayer's gross income.
LO 8-2
Which of these is an above-the-line deduction?
A) Deductible IRA contributions
B) State taxes paid by the individual
C) Medical expenses
,D) Gifts to charities A) Deductible IRA contributions
Explanation
Deductible IRA contributions are one of the above-the-line deductions, which generally are
subtracted from gross income to arrive at adjusted gross income The other options listed are
itemized, or below-the-line deductions.
LO 8-2
Which of the following is NOT allowed as an itemized deduction?
A) Qualified medical expenses
B) Qualified real estate taxes
C) Qualified home mortgage interest
D) Rent paid for an apartment D) Rent paid for an apartment
Explanation
Rent payments are not allowed as itemized deductions. The other options listed are allowed as
itemized deductions.
LO 8-2
, Bergen and Chris, a married couple filing jointly, are planning to buy a home in 2024. What is
the maximum mortgage amount they can have and fully deduct the mortgage interest?
A) $1.5 million
B) $2 million
C) $1 million
D) $750,000 D) $750,000
Explanation
The mortgage interest for a home purchased in 2024 is deductible for principal amounts up to
$750,000.
LO 8-2
Which of these shows the progression through the individual income tax return (Form 1040) in
the CORRECT order?
A) Adjusted gross income, gross income, standard or itemized deduction, tax credits, taxable
income
