A Taxpayer Has Low AGI This Year,but Unusually High Itemized

question 10

Multiple Choice

A taxpayer has low AGI this year,but unusually high itemized deductions.The one itemized deduction that is allowed to increase the NOL is

• A)state and local income and property taxes.
• B)home mortgage interest.
• C)medical expenses.
• D)federal disaster casualty loss on personal-use assets.

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Definitions:

Cumulative Preferred Stock

A type of preferred stock that accrues dividends if they are not paid in the year they are due, with these dividends being required to be paid out before any dividends can be paid to common stockholders.

Stockholders' Equity

The ownership interest of shareholders in a corporation, represented by share capital plus retained earnings minus treasury shares.

Par Value

A nominal value assigned to share of stock by the corporation's charter, used primarily for legal purposes.

Paid-In Capital

Funds contributed by shareholders in exchange for shares of stock, representing a source of equity financing for a company.