Chapter 7 - Below the line deductions Flashcards

1
Q

Medical expense deduction

A

Must exceed 7.5% of AGI
Medical expenses - (AGI x 7.5%) = deduction

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2
Q

Deduction for state and local income and property taxes paid

A

up to $10,000

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3
Q

Acquisition indebtedness

A

Used to acquire or improve a principal residence
Interest deductible on up to $750,000 principal loan amount (after 2025 $1 million)

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4
Q

Home equity indebtedness

A

Used for other purposes such as buying a car or pay off student loans
Interest deductible on up to $100,000 principal loan amount after 2025

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5
Q

Donation to public charity % of AGI

A

Cash 100%
Non-LTCG Property 50%
LTCG Property 30%

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6
Q

Donation to private charity % of AGI

A

Cash 30%
Non-LTCG Property 30%
LTCG Property 20%

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7
Q

Non-Itemizers deduction

A

Single - $300 below the line deduction
MFJ - $600 below the line deduction

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8
Q

LTCG Property valuation

A

FMV on day of gift = 30% deduction
Using the original cost basis for value = 50% deduction

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9
Q

Corporation charitable deductions

A

25% of taxable income

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10
Q

Personal loss deduction for personal casualty and theft declared by president

A

Lesser of:
Decline in value of the asset less insurance proceeds
or
Adjusted basis in asset less insurance proceeds

$100 deducted from loss per occurrence
Only losses in excess of 10% AGI are deductible

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11
Q

Business casualty and theft losses

A

complete casualty = adjusted basis in property less insurance proceeds received

partial casualty is lesser of:
Decline in value of the asset less insurance proceeds
or
Adjusted basis in asset less insurance proceeds

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12
Q

QBI deduction

A

Lesser of
20% of QBI
or
20% of adjusted taxable income less net capital gains

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13
Q

QBI taxable income phaseouts

A

MFJ $340,100 - $440,100
MFS $170,050 - $220,050
Single - $170,050,- $220,050

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14
Q

Loan interest to purchase tax-exempt bonds

A

Not deductible

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15
Q

Deductible medical expenses

A

Prescription drugs
Health ins premiums
Capital expenditures
Nursing home
LTC Premiums
Travel & lodging
Diagnosis, cure & treatment

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16
Q

Deductible taxes

A

State & local income tax
State sales tax (alternative to deducting state income tax)
Foreign property taxes
Property taxes

17
Q

Maximum amount deductible for charitable contributions

A

60% of AGI carry forward for up to 5 years