R2 - Itemized Deductions

Question 1

Std Deduction = Additional

Answer 1

• > 65yo OR blind: $1,650 (S); $1,300 (MFJ) per person

- >65yo AND blind: Above x2.

Question 2

Std Deduction = Dp of another

Answer 2

Greater of:

• $1,100
• Earned income + $300

Question 3

Med Expenses

Answer 3

• Cap expenditures are deductible, but are reduced by the amount that FMV of property increases.

Question 4

Mtge Interest Expense

Answer 4

• Mtge has to be up to $750,000 (MFJ); $375,000 (MFS)
• Points related to debt are deductible immediately.
• Points related to refinancing are amortized.

Question 5

Investment Interest Expense

Answer 5

• Deductible up to net taxable investment income. Like gambling loss rules.
• Exp for Tax Free securities are not deductible.

Question 6

Prepaid interest

Answer 6

• Deduct when both incurred and paid

Question 7

Charitable Contributions

Answer 7

Cash = Max allowed is 60% of AGI
FMV = Max allowed is 30% of AGI
Appreciated Cap Gain Prop = ST: >of FMV or Adj Basis; LT: FMV
Max allowed is lesser of 30% of AGI OR remaining amount to reach the 60% cash deduction. 20% allowed for private non operating charity orgs.
If donated prop that is immediately sold, then contrib is limited to basis or gain.
Disallowed charity is C/O 5 years

Question 8

Casualty and Theft Losses = Federally declared area

Answer 8

Smaller loss or decrease in FMV
(-) Insurance Recovery (claim must be made)
(-) $100
(-) 10% AGI
(=) Deductible Loss