Deductions Flashcards
What is the maximum deduction on interest paid on student loans
2500
how much of self employment taxes can be deducted for agi?
half
are meals deductible during a move?
no
are temp living expenses during a move deductible
no
What is included in qualified moving expenses
moving household goods and lodging while moving
How much of medical expenses are allowable as a deduction?
medical expenses up to 10% of AGI
how much investment interest expense is deductible?
deductible as itemized deduction to the extent of net investment income (inv income - noninterest investment income) Remaining inv interest expense is carried over indefinitely.
are federal income taxes deductible?
no
what is the deduction for charitable contributions limited to?
50% of AGI
What is the carryover for charitable contributions?
5 years forward, no carryback
for casualty losses of personal property, the deduction is the lesser of
- the decline in FMV of the property or
- the adjusted basis of the property
what itemized deductions are subject to the 2% floor of agi
- tax prep fees
- unreimbursed job expenses
- job related educational expenses (subscriptions to journals)
- other misc deductions
- custodial fees for a brokerage acct
LTCG long term capital gains - contributed (stock, art - contributions to charity) what amount can TP deduct
can deduct FMV to the extent of 30% of AGI
How much of personal property taxes paid are deductible?
deducitble in full on schedule A
how are unreimbursed expenses for work related expenses deducted?
as an itemized deduction subject to a threshold of 2% of AGI
how much interest on a home equity indebtedness is deductible?
up to $100k is fully deductible, regardless of how the proceeds of the loan are used.
How much of medical expenses are deductible?
the unreimbursed cost is deductible as an itemized deduction subject to a thresold of 10% of AGI (if not over 65)
how is a theft loss on personal property deducted
as an item. ded. subject to a $100 floor and a threshold of 10%
how much interest on acquisition indebtedness is deductible
up to $1M is fullly deductible as an item. ded. if the mortgage is secured by the TP principal or 2nd residence.
what is the 1040 schedule C used for?
Profit or Loss from business
What is the 1040 Schedule A used for?
Itemized deductions
if business travel is mixed with personal travel, is the cost of plane ticket deductible?
only if the business days are more than half of the personal days (if fri and mon are business days, the weekend also counts as business days)
when are educational expenses deductible?
to maintain or improve existing job skills required in current job or to meet requirements of ER or imposed by law to retain employment status
Schedule B
interest and dividend income
Schedule E - supplemental income and loss
- oil royalties received
- share of ordinary income from limited partnership
- taxable income from rental of townhouse
Taxable as other income on 1040
- prizes won
- payment for jury service
how are Qualifying medical expenses not reimbursed by insurance treated
Reported in Schedule A—Itemized Deductions (deductibility subject to threshold of 10% of adjusted gross income).
how are self employment taxes paid treated
50% deductible on 1040 to arrive at AGI
how many years can NOL be carried back/forward
back 2 and forward 20
Corporations other than certain financial institutions are required to use which bad debt write off method
the direct charge off method
under the direct charge off method
corporations may claim a deduction once a specific business debt becomes partially or wholly worthless and a specific nonbusiness debt becomes wholly worthless.
how are unreimbursed employee expenses treated
50% deductible from AGI and subject to the 2% floor
how are gambling losses treated
losses to the extent of winnings are categorized as misc deductions not subject to the 2% floor
is interest from us treasury bonds taxable?
yes
when is a hobby considered profit seeking?
if profit in 3 of last 5 years
what amount of hobby expenses are deducitble?
to the extent of hobby income
for a 2nd home used for personal use, what can be deducted
real estate taxes and mortgage (must be reported on schedule A)
how can suspended losses be carried
can be carried forward but not back, until utilized
can passive loss reduce income?
no, only in the year that the passive actvity is sold and suspended losses are released and can offset all types of income.
passive losses can only offset
passive income
a TP who actively manages real estate, can deduct what amount of losses
a max of $25k per year for losses (if AGI is under $100k - if over $100k, 50%)
what is the age test requirements for a qualifying child as a dependent?
less than 19 or less than 24 if a full time student for at least 5 months of the year. cannot have provided more than 50% of own support
to be claimed as a dependent on someones tax return as a qualifying relative, what does your income have to be
under $4,000 (SS benefits do not count)
