Deductions

Question 1

Qualified moving expenses are limited to the expenses

Answer 1

For moving the household goods and lodging

Question 2

What deductions are subject to a 2% floor?

Answer 2

1. Employee expenses not reimbursed under an accountable plan;
2. Investment expenses;
3. Tax return preparation expenses;
4. Home office expenses of an employee;
5. Hobby expenses

Question 3

List the characteristics of a charitable contribution.

Answer 3

1. Must be made to qualifying organization (not political organizations);
2. Can include cash or property, but not services;
3. Written records of contribution are required;
4. Limited based on AGI.

Question 4

What floor limits are applied to casualty losses on personal use property?

Answer 4

1. $100 for each occurrence;

2. Total losses for the year are reduced by 10% of AGI.

Question 5

How is casualty loss calculated for business property?

Answer 5

Insurance proceeds less adjusted basis of damaged property.

Question 6

How is the 2% of the AGI floor limit calculated?

Answer 6

Applied by subtracting 2% of AGI from subjected deductions.

Question 7

Describe the limits on charitable contributions for individuals.

Answer 7

1. 50% of AGI
2. Deduction for contributions of long-term capital gain property to “A” charities limited to 30% of AGI;
3. Deduction for contributions of long-term capital gain property to “B” charities limited to 20% of AGI;
4. Unused deductions carry forward 5 years.