Chapter 6 Flashcards

1
Q

business expense deductions are reported on Schedule ___

A

C

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2
Q

rental or royalty income is deductible ____ AGI

A

for

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3
Q

self-employment tax is deducted _____ AGI

A

for

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4
Q

business expenses must be _____ and _____ to be deducted

A

ordinary and necessary

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5
Q

taxpayers traveling to receive necessary medical care can deduct costs of:

A

transportation and lodging

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6
Q

school loans are deductible _____ AGI, with a limit of $_____

A

for AGI, limit of $2,500 annually

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7
Q

the deduction of investment interest is limited to a taxpayers net:

A

investment income

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8
Q

formula for medical expenses deducted with AGI floor

A

(medical expenses) - (7.5% * AGI)

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9
Q

MFJ homeowners can deduct interest on up to _____ of acquisition of indebtedness after 2017

A

$750,000

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10
Q

2 types of interest expense deductible as itemized deductions:

A
  1. interest on indebtedness secured by a qualified home
  2. investment interest
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11
Q

3 broad categories of For AGI deductions

A
  1. directly related to business expense
  2. indirectly related to business expense
  3. miscellaneous items
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12
Q

3 types of For AGI business income

A
  1. trade or business
  2. production of income
  3. personal use
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13
Q

business expenses are generally deductible ____ AGI

A

for

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14
Q

which investment expense is For AGI and which is From AGI?

A

for: rent/royalty
from: interest expense

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15
Q

income/loss from flow-through entities and rent/royalty expenses are reported on Schedule ____

A

E

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16
Q

two types directly related to business activities

A

rent/royalty and flow-through entities

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17
Q

four types indirectly related to business activities

A
  1. moving expenses
  2. health-insurance for self-employed
  3. self-employment tax deduction
  4. deductions for IRA
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18
Q

when/where is it deductible?
moving expenses

A

FOR AGI, not deductible except if active military changing station

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19
Q

when/where is it deductible?
deductions for IRA

A

FOR AGI, depends on income/whether employee or self-employed

20
Q

when/where is it deductible?
health insurance for self-employed

A

FOR AGI, can deduct premiums for taxpayer and dependents

21
Q

when/where is it deductible?
self-employment tax deduction

A

FOR AGI, half of self-employment taxes paid

22
Q

four categories of misc For AGI deductions

A
  1. alimony (pre 2019)
  2. education expenses (K-12) up to $300
  3. interest on qualified education loan up to $2,500
  4. attorney fees for IRS whistleblowers
23
Q

2 categories of FROM AGI deductions

A
  1. larger of standard or itemized
  2. 20% of QBI
24
Q

itemized deductions are reported on schedule ____

25
7 categories of itemized deductions
1. medical/dental expenses 2. taxes 3. interest on qualified residence 4. investment interest expense 5. charity contributions 6. casualty/theft 7. other itemized (gambling, life annuity)
26
SALT deductions are limited to ______ per year
$10,000
27
2 categories of SALT deductions
1. SALT and foreign income taxes (can choose to deduct sales tax instead) 2. SALT property tax
28
mortgage interest deduction cap
$750,000 for both residences
29
mortgage interest is limited to:
principal use plus one other residence
30
____ AGI deductions generally carry forward 5 years
From
31
investment interest expense is deductible limited to ______
the amount of investment income
32
are political contributions deductible?
no
33
when are monetary charity contributions are deductible?
in year paid, including travel costs (14 cents per mile)
34
how are property charity contributions deductible?
fair market value of the capital gains property on the date of donation
35
taxpayer can only deduct the ______ if he received goods from charity he contributed to
excess
36
must have a _______ _________ of charity contribution
written record (name of charity, date, how much given)
37
cash donations to charity are limited to ____ of AGI
60%
38
property donations to charity are limited to ______ of AGI
50%
39
casualty losses are subject to a _____ floor per casualty
$100
40
casualty losses are limited to _____ of AGI per year
10%
41
3 factors for standard deduction amount
1. filing status 2. age of taxpayer (over 65) 3. legally blind
42
timing strategy: bunching itemized deductions
shifting when deductions are paid to try to maximize itemized deduction
43
standard deduction for an individual claimed as a dependent
larger of: 1. $1,250 or 2. $400 plus earned income up to a total of regular standard deduction
44
which two specified services or trades are allowed to be claimed as QBI?
architecture and engineering
45
when does the QBI exclusion of services rule not apply?
when the taxpayer is lower income
46