For tax year 2025, Jordan, a single taxpayer who itemizes deductions, has adjusted gross income of $100,000 and pays $12,000 of otherwise qualifying unreimbursed medical expenses. What medical expense deduction is allowable before considering any other limitation?
A. $7,500
B. $12,000
C. $0
D. $4,500
Source: PRIMARY -- Publication 502, section 'How Much of the Expenses Can You Deduct?', 7.5%-of-AGI limitation (https://www.irs.gov/publications/p502)
A taxpayer sells investment land for $200,000 on the installment method. Adjusted basis is $120,000, selling expenses are $10,000, and there is no debt or depreciation recapture. The taxpayer receives $50,000 of principal in the year of sale. What gross profit is reported from that principal payment?
A. $17,500
B. $20,000
C. $30,000
D. $50,000
Source: PRIMARY -- Publication 537, sections 'Gross Profit,' 'Contract Price,' and 'Gross Profit Percentage' (https://www.irs.gov/publications/p537)
In December 2025, a cash-method landlord receives $2,000 designated as January 2026 rent and a separate $1,500 security deposit that the lease requires to be returned if the tenant causes no damage. Which amount is generally included in the landlord's 2025 rental income?
A. The $2,000 advance rent
B. Only the $1,500 refundable deposit
C. The full $3,500
D. Neither amount until the lease ends
Source: PRIMARY -- Publication 527, chapter 1 headings 'Advance Rent' and 'Security Deposits' (https://www.irs.gov/publications/p527)
For tax year 2025, an unmarried taxpayer who is under age 65, is not blind, and may not be claimed as a dependent has $14,900 of allowable itemized deductions. Ignoring qualified disaster additions, what deduction should the taxpayer generally claim to maximize the deduction?
A. $14,900 itemized deduction
B. $15,000 standard deduction
C. $15,750 standard deduction
D. $23,625 standard deduction
Source: PRIMARY -- Publication 505 (2025), chapter 2 table 'Standard Deduction Amounts for 2025' (https://www.irs.gov/pub/irs-pdf/p505.pdf)
A beneficiary receives life-insurance proceeds in a lump sum because of the insured's death. No transfer-for-value, interest payment, or other exception applies. How are the proceeds generally treated for federal income-tax purposes?
A. They are excluded from the beneficiary's gross income
B. They are always long-term capital gain
C. They are deductible by the beneficiary
D. They are taxable wages
Source: PRIMARY -- Publication 525, section 'Life Insurance Proceeds' under Other Income (https://www.irs.gov/publications/p525)
