Q1. Grace paints pictures as a hobby and often gives them to her family as gifts. Family members also buy them to give to others. Grace earned $2,250 selling paintings. Her expenses are as follows:
Paints for paintings she sold $679
Paints for paintings she gave as gifts 850
Canvas for paintings she sold 1,200
Canvas for the paintings she gave as gifts 1,450
Brushes for the paintings she sold 350
Brushes for the paintings she gave as gifts 450
Frames for the paintings she gave as gifts 980
What is the amount Grace should report as hobby expense on Schedule A before applying the limit?
a) $2,229
b) $2,250
c) $5,959
d) $ 0
Q2. Natalie had an AGI of $70,000 and the following miscellaneous itemized deductions:
Employee business expenses $898
Tax preparation fees 154
Investment expenses 100
What is the amount of Natalie's miscellaneous itemized deductions on line 27, Schedule A?
a) $1,554
b) $1,400
c) $1,152
d) $ 0
Q3. Sarah wants to start a Coverdell ESA for her grandson's education. taxpayer establish a Coverdell ESA?
a) Where should a
b) At the IRS
c) A local loan company
d) Any bank in the U.S.
e) An online loan company