Exemption Amounts and Itemized Deductions Are Two Types of Reductions

question 41

Multiple Choice

Exemption amounts and itemized deductions are two types of reductions used to calculate taxable income.Which of the following are characteristics of these types of deductions?
I.Taxpayers deduct the larger of itemized deductions or the standard deduction.
II.Exemption amounts are dependent on amounts of expenditures for dependents.
III.Deductions for adjusted gross income are limited to those incurred in a trade or business,incurred in the earning of income,and certain specifically allowed personal expenses of individuals.
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• A)Only statement III is correct.
• B)Statements I and II are correct.
• C)Statements I and III are correct.
• D)Statements II and III are correct.
• E)Statements I,II,and III are correct.

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