Deductions

Question 1

What is the maximum deduction on interest paid on student loans

Answer 1

2500

Question 2

how much of self employment taxes can be deducted for agi?

Answer 2

half

Question 3

are meals deductible during a move?

Answer 3

no

Question 4

are temp living expenses during a move deductible

Answer 4

no

Question 5

What is included in qualified moving expenses

Answer 5

moving household goods and lodging while moving

Question 6

How much of medical expenses are allowable as a deduction?

Answer 6

medical expenses up to 10% of AGI

Question 7

how much investment interest expense is deductible?

Answer 7

deductible as itemized deduction to the extent of net investment income (inv income - noninterest investment income) Remaining inv interest expense is carried over indefinitely.

Question 8

are federal income taxes deductible?

Answer 8

no

Question 9

what is the deduction for charitable contributions limited to?

Answer 9

50% of AGI

Question 10

What is the carryover for charitable contributions?

Answer 10

5 years forward, no carryback

Question 11

for casualty losses of personal property, the deduction is the lesser of

Answer 11

• the decline in FMV of the property or

- the adjusted basis of the property

Question 12

what itemized deductions are subject to the 2% floor of agi

Answer 12

• tax prep fees
• unreimbursed job expenses
• job related educational expenses (subscriptions to journals)
• other misc deductions
• custodial fees for a brokerage acct

Question 13

LTCG long term capital gains - contributed (stock, art - contributions to charity) what amount can TP deduct

Answer 13

can deduct FMV to the extent of 30% of AGI

Question 14

How much of personal property taxes paid are deductible?

Answer 14

deducitble in full on schedule A

Question 15

how are unreimbursed expenses for work related expenses deducted?

Answer 15

as an itemized deduction subject to a threshold of 2% of AGI

Question 16

how much interest on a home equity indebtedness is deductible?

Answer 16

up to $100k is fully deductible, regardless of how the proceeds of the loan are used.

Question 17

How much of medical expenses are deductible?

Answer 17

the unreimbursed cost is deductible as an itemized deduction subject to a thresold of 10% of AGI (if not over 65)

Question 18

how is a theft loss on personal property deducted

Answer 18

as an item. ded. subject to a $100 floor and a threshold of 10%

Question 19

how much interest on acquisition indebtedness is deductible

Answer 19

up to $1M is fullly deductible as an item. ded. if the mortgage is secured by the TP principal or 2nd residence.

Question 20

what is the 1040 schedule C used for?

Answer 20

Profit or Loss from business

Question 21

What is the 1040 Schedule A used for?

Answer 21

Itemized deductions

Question 22

if business travel is mixed with personal travel, is the cost of plane ticket deductible?

Answer 22

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)

Question 23

when are educational expenses deductible?

Answer 23

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

Question 24

Schedule B

Answer 24

interest and dividend income

Question 25

Schedule E - supplemental income and loss

Answer 25

• oil royalties received
• share of ordinary income from limited partnership
• taxable income from rental of townhouse

Question 26

Taxable as other income on 1040

Answer 26

• prizes won

- payment for jury service

Question 27

how are Qualifying medical expenses not reimbursed by insurance treated

Answer 27

Reported in Schedule A—Itemized Deductions (deductibility subject to threshold of 10% of adjusted gross income).

Question 28

how are self employment taxes paid treated

Answer 28

50% deductible on 1040 to arrive at AGI

Question 29

how many years can NOL be carried back/forward

Answer 29

back 2 and forward 20

Question 30

Corporations other than certain financial institutions are required to use which bad debt write off method

Answer 30

the direct charge off method

Question 31

under the direct charge off method

Answer 31

corporations may claim a deduction once a specific business debt becomes partially or wholly worthless and a specific nonbusiness debt becomes wholly worthless.

Question 32

how are unreimbursed employee expenses treated

Answer 32

50% deductible from AGI and subject to the 2% floor

Question 33

how are gambling losses treated

Answer 33

losses to the extent of winnings are categorized as misc deductions not subject to the 2% floor

Question 34

is interest from us treasury bonds taxable?

Answer 34

yes

Question 35

when is a hobby considered profit seeking?

Answer 35

if profit in 3 of last 5 years

Question 36

what amount of hobby expenses are deducitble?

Answer 36

to the extent of hobby income

Question 37

for a 2nd home used for personal use, what can be deducted

Answer 37

real estate taxes and mortgage (must be reported on schedule A)

Question 38

how can suspended losses be carried

Answer 38

can be carried forward but not back, until utilized

Question 39

can passive loss reduce income?

Answer 39

no, only in the year that the passive actvity is sold and suspended losses are released and can offset all types of income.

Question 40

passive losses can only offset

Answer 40

passive income

Question 41

a TP who actively manages real estate, can deduct what amount of losses

Answer 41

a max of $25k per year for losses (if AGI is under $100k - if over $100k, 50%)

Question 42

what is the age test requirements for a qualifying child as a dependent?

Answer 42

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

Question 43

to be claimed as a dependent on someones tax return as a qualifying relative, what does your income have to be

Answer 43

under $4,000 (SS benefits do not count)