Deductions and Credits — Enrolled Agent — SEE Part 1 (Individuals) Practice Test
108 questions in this topic · 30 drawn at random this round
A taxpayer donates publicly traded stock held for three years to a qualified public charity. The stock has a fair market value of $20,000 and a basis of $5,000. If she deducts the full fair market value, her deduction for this appreciated capital-gain property is limited to what percentage of AGI?
Session Progress
This Enrolled Agent — SEE Part 1 (Individuals) Deductions and Credits practice set has 108 practice questions based on the official exam materials, each with an instant explanation.
Sample questions
Three questions from the Deductions and Credits bank with the correct answer and an explanation. The practice quiz above draws 30 questions at random from the same bank.
For an individual taxpayer who itemizes, unreimbursed medical and dental expenses are deductible only to the extent they exceed what percentage of adjusted gross income (AGI)?
- 7.5% of AGI — Correct answer
- 10% of AGI
- 2% of AGI
- 5% of AGI
Explanation: Under IRC §213(a), the medical expense deduction on Schedule A is limited to the amount of qualified unreimbursed expenses that exceeds 7.5% of AGI. Only the excess above that floor is deductible.
Handbook: Deductions and Credits — Medical and Dental Expenses (§213)
Qualified medical expenses are deductible on Schedule A only to the extent that the total of such expenses exceeds ______.
- 7.5% of adjusted gross income — Correct answer
- 2% of adjusted gross income
- 10% of taxable income
- the standard deduction amount
Explanation: IRC §213(a) allows a deduction only for the portion of unreimbursed qualified medical expenses that exceeds 7.5% of AGI. See Pub 502 for the computation on Schedule A.
Handbook: Deductions and Credits — Medical and Dental Expenses (§213)
A taxpayer pays for elective cosmetic surgery to improve her appearance. The procedure does not treat any illness, injury, or deformity. How is the cost treated for the medical expense deduction?
- It is not a deductible medical expense — Correct answer
- It is fully deductible as a medical expense
- It is deductible only to the extent it exceeds 2% of AGI
- It is deductible as an adjustment to income
Explanation: Under IRC §213(d)(9), purely cosmetic surgery that does not meaningfully promote the proper function of the body or treat illness or disease is not a deductible medical expense. Pub 502 confirms elective cosmetic procedures are excluded.
Handbook: Deductions and Credits — Medical and Dental Expenses (§213)