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Part 1 350 words

A friend who knows you are taking taxation class wants to know if she can deduct some expenses. Her adjusted gross income for 2012 was $58,000. Pick one of the expenses below and fully explain the proper tax treatment

1. Contributions of 50 hours of service to a qualified charitable organization. The estimated value of service is $1,000. In addition, she drove 200 miles to perform the services.

2. Medical expenses for breast argumentation. Her out-of-pocket expenses was $7,000.

3. Short term capital loss of $4,000.

4. Interest paid on car note of $3,126 and interest paid on student loan $975.20.

5. Unreimbursed employee travel expenses of $2,980.

6. Gambling winnings of $1,820 and losses of $4,150.

7. Contributions of cash and checks of $1,800 as well as household items worth $750 to a local women's shelter. The shelter is a 501c3 organization.

8.   Home mortgage interest of $5,978 and real estate taxes of $2,540 were paid on her personal residence.

Part 2 350 words

 

Fair Isaac Corporation (FICO) score was created to determine the credit worthiness of individuals. What is the connection between a FICO score and interest rate? Do you feel there is too heavy a reliance on FICO scores in determining the credit worthiness of individuals? Please explain your position.

    • 7 years ago
    • 8
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