Deductions

Question 1

Rental Real Estate Losses

Answer 1

• Rental Income excluded if house rented less than 14 days
• Active participation: Up to $25,000 of losses can offset ordinary income reduced by 50% of amount exceeding $100,000 (completely phased out at $150,000)
• Other passive activity and portfolion income can only offset passive income
• Losses fully deductible in year of disposal

Question 2

NOL

Answer 2

Taxable Loss
\+ Personal Exemption
\+ Standard Deduction
- Non-business income
\+ Short-term capital loss

Question 3

Gross Income

Answer 3

Wages
Interest
Dividends
State Refunds
Alimony
Business Income
Capital Gain/Loss
IRA Income
Pension and Annuity
Rental Income/Loss
K-1 Income Loss
Unemployment Compensation
Social Security Compensation
Other Income

Question 4

Adjustments for AGI

Answer 4

Alimony Paid
Half of Self-Employment Tax
Self-Employed Health Insurance
Moving Expenses
Repayment of Jury Pay
Keogh Contributions
Student Loan Interest
Tuition
Early Withdrawal Penalty
Attorney Fees for Tax Return

Health Savings Accounts
DPAD
Educator Expenses

Question 5

Itemized Deductions (Limitations)

Answer 5

Medical (Excess of 10% of AGI, 7.5% for age 65)
Taxes - State/Local, Property (Full)
Home Acquisition Interest (1,000,000)
Home Equity Interest (100,000 or home equity)
Investment Interest (Net Investment Income)
Charity (See below)
Casualty/Theft (-100 then excess of 10% AGI)
Miscellaneous (Excess of 2% of AGI)
- Unreimbursed employee business expenses (travel, entertainment, education)
- Investment expenses
- tax return preparation
- Home office or hobby expenses (limited to revenue)
Other Miscellaneous
- Gambling losses (Extent of winnings)

Question 6

IRA Contribution

Answer 6

For active participants phased out at $98,000

For inactive participants phased out at $183,000

Question 7

Charitable Contributions

Answer 7

Limitation for qualified orgs 50% AGI
Applied before 30%
Taxpayer limited to 30% AGI for FMV property held more than 1 year
Deduct basis if less than one year

Corporations 10% AGI limit

Question 8

Kiddie Tax

Answer 8

Unearned Income
+ Earned Income
- Standard Deduction
= Taxable Income

Unearned Income > 2,100 taxed at parent’s rate
Remainder taxed at child’s rate