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HS321 > Chapter 6 – Itemized Deductions > Flashcards

Chapter 6 – Itemized Deductions Flashcards

1
Q

In order for a charity contribution to be tax deductible, what are the 4 requirements?

A
  1. Qualified organization
  2. cash or property
  3. contributions has to exceed the value of anything recieved from the charity
  4. Contribution has to be made before the end of the year
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2
Q

For people like you and I, charity deductions are limited to your…

A

AGI.

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3
Q

Charity contributions that cannot be deducted can be carried forward up to ____ years.

A

5

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4
Q

Corporations can deduct charity contributions up to ___% of their taxable income.

A

10%

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5
Q

If you get an item from a charity because you donated money, how much of the charity donation is taxable?

A

The excess of the value of the contribution over the item recieved from the charity.

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6
Q

Are donations to a foreign charity tax-deductible?

A

No

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7
Q

Can you deduct time or services to a charity?

A

No

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8
Q

Can you deduct the right to use your property as a charitable contribution?

A

No

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9
Q

Can you deduct a raffle ticket from charity?

A

No.

Buying a raffle ticket is considered a gambling loss.

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10
Q

If a donor irrevocably assigns a life insurance policy to a qualified charity, the donor will receive both an…

A

income tax charitable deduction and gift tax charitable deduction.

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11
Q

Cash is deductible as a charitable contributions up to a maximum of ___% to the extent of its______________________.

A

50% of FMV

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12
Q

Inventory is generally deductible to the extent of ¬¬¬___% of the donor’s ______in the property.

A

50% of basis

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13
Q

Stocks/bonds are deductible as a charitable contribution up to a maximum of ___% to the extent of its______________________.

A

30% of FMV

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14
Q

Tangible personal property that is use-related is deductible up to a maximum of ___% to the extent of its______________________.

A

30% of its full fair market value

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15
Q

The charitable deduction for a gift of a paid-up life insurance policy is a maximum of __% of the ______________of the policy.

A

50% of the replacement cost

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16
Q

Tangible personal property that is “non-use related” is deductible up to a maximum of ___% to the extent of the donor’s _____ in the property.

A

50% of basis

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17
Q

The charitable deduction for a gift of a “paid-up” life insurance policy is a maximum of ___% of the ______________of the policy.

A

50% of the replacement cost

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18
Q

The charitable deduction for a policy in “premium paying state” is a maximum of ___% of the interpolated terminal reserve.

A

50% of interpolated terminal reserve

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19
Q

A “life insurance policy” must be ____________ to be claimed as a charity contribution.

A

given to the charity

20
Q

For a you to claim a property donation of $5,000 or more as a charitable contribution, you have to…

A

prove that you really did give the donation.

21
Q

In order for you to claim a closely held stock (eg - stock for a small or family business) of $10,000 or more as a charitable contribution, you have to prove that you really did give the donation by getting a…

A

valuation.

22
Q

Can you deduct on your taxes the interest from your personal auto loan?

A

No

23
Q

Can you deduct on your taxes the interest from a personal credit card?

A

No

24
Q

Can you deduct on your taxes the interest from your student loans?

A

Yes

25
Q

Can you deduct on your taxes the interest from your home mortgage?

A

Yes; only your first or a second mortgage; but you’re limited to only two homes

26
Q

The aggregate amount of acquisition of a home mortgage debt for a possible tax deduction cannot be more than…

A

$1,000,000. ($500,000 Married filling Separate).

27
Q

The aggregate amount of a home equity loan for a possible tax deduction cannot be more than…

A

$100,000. ($50,000 Married filling Separate).

28
Q

Points paid on a loan may be deductible in full during the year that you…

A

got the loan.

29
Q

In order for points to be deducted during the year the loan was acquired, the loan has to be secured for a…

A

principal residence.

30
Q

In order for points to be deducted during the year the loan was acquired, the points has to be based off the…

A

percentage of your mortgage principle.

31
Q

In order for points to be deducted during the year the loan was acquired, the points has to be paid directly to the…

A

bank.

32
Q

What if you and Kristen refinance your home, are the points from the refinancing process deductible?

A

Yes; but it will be over the life of the loan.

33
Q

Margin interest is also called…

A

investment interest.

34
Q

Margin interest is deductible, but only for your…

A

Taxable investment income.

35
Q

Name 3 taxable margin interest for an investment.

A

Investment Grade Corporate Bonds
Money Market Securities
Treasury Notes

36
Q

In order for your unreimbursed out-of-pocket medical expenses to be deductible, it has to be more ___% of you AGI.

A

10%

7.5% if your old than 65

37
Q

Health care and long-term care insurance premiums paid by someone who is “self-employed” (partnerships too) are deductible, but is not subject to the __________.

A

10% floor.

38
Q

Keep in mind that everything is deductible as out of pocket medical expenses except these 5 things…

A
  1. Cosmetic surgery (unless it’s to fix a deformity)
  2. Weight-loss clinics (unless by a doctor)
  3. Gym memberships
  4. Maternity clothes
  5. Over-the-counter drugs or vitamins
39
Q

Long-term care insurance premiums for you and your spouse are…

A

tax deductible.

40
Q

Expenses paid for caring for your relative is not deductible unless the person giving the care is a…

A

licensed health care professional.

41
Q

Benefits you get from long-term care insurance premiums you pay is…

A

tax-free.

42
Q

What are the requirements for long-term insurance care to be tax-qualified? 7 Things…

A

No cash, no forfeiture, and not under Medicare
Better be renewable with dividends in the future.
To protect provisions with qualified services.

43
Q

A deduction from health insurance paid by self-employed people cannot exceed the person’s…

A

earned income from the business.

44
Q

What are 3 types of taxes that can be deducted?

A

state and local taxes
property taxes
foreign taxes

45
Q

Which one do you deduct, your sales taxes or state income taxes?

A

Whichever one is the highest.

46
Q

What are 2 types of taxes that are not deducted?

A

Federal income taxes

Federal gift and estate taxes

HS321 (14 decks)

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