Jerry Has Assets of $200,000, a Net Worth of $150,000

question 18

Multiple Choice

Jerry has assets of $200,000, a net worth of $150,000, and an annual income of $100,000. What are Jerry's liabilities?

• A) $100,000
• B) $250,000
• C) $50,000
• D) $450,000

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Definitions:

2% Floor

A tax rule that limits the deductibility of certain miscellaneous expenses to only the portion that exceeds 2% of the taxpayer’s adjusted gross income.

Sales Taxes

Taxes levied by governments on the sale of goods and services, which are typically paid by the consumer at the point of purchase.

Schedule A

A form used with the U.S. federal tax return (Form 1040) to itemize deductions, including medical expenses, state and local taxes, and charitable donations.

Itemized Deduction

Itemized deductions are specific expenses allowed by the IRS that can decrease an individual's taxable income.