Match Each Statement with the Correct Term Below

question 11

Multiple Choice

Match each statement with the correct term below.
-Deductions from AGI

• A)Prepaid interest.
• B)Either a qualifying child or a qualifying relative
• C)One test for a qualifying relative.
• D)The minimum amount a taxpayer can deduct for personal expenditures.
• E)A deduction in this category is always allowed. That is, there is no minimum allowable amount and generally no income limitation placed on these deductions.
• F)Generally, these deductions are for specifically allowed personal expenditures.
• G)An exception to this test is a custodial parent.
• H)Interest paid on debt used to buy securities.
• I)Interest paid on credit cards, personal loans, car loans, etc.
• J)Interest paid on a mortgage secured by the taxpayer's residence. The proceeds of the loan are used to pay off a credit card, the interest is not deductible.
• k.A tax designed to prevent the shifting of unearned income to children of the taxpayer.

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Definitions:

Usury Law

Usury Law refers to regulations governing the amount of interest that can be charged on a loan, intended to protect borrowers from excessive and unfair interest rates.

Interest Rate

The cost of borrowing money or the return on saving, expressed as a percentage of the principal amount per period.

Elastic

A characteristic of a good or service that describes its responsiveness to changes in price; highly sensitive to price changes.

Rents

Payments made to the owner of a property (such as land, buildings, or apartments) for the use of that property.