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. Michael Jordan pays a financial adviser $3,000 to help him manage his investment portfolio during the current year. Michael receives $5,000 in interest from investments in Reebok and Nike bonds, and $2,500 in interest from investments in City of Chicago bonds. How much may Michael deduct for the current year?

 

A. $2,000         B. $0  C. $1,000  D. $1,500  E. $3,000

 

 

 

. Which of the following statements is correct?

 

. Charitable contributions that are not deducted in the current year due to limitations (e.g., 20% or 60% of AGI) cannot be carried forward to future years.

 

. Taxpayer will claim the lesser of (state and local income taxes) or (state or local sales taxes) as itemized deduction.

 

. The deduction amount on state and local income or sales taxes cannot exceed $10,000 ($5,000 for married, filing separately filing status).

 

. A US citizen taxpayer who earns $200,000 in a foreign country can choose to exclude the foreign earned income from US taxable income when filing a tax return for the IRS.

 

. In general, gambling losses are fully deductible as long as the losses are documented.