Mod 35: Individual Taxation Pt. 3 Flashcards
(119 cards)
Mortgage points:
If you used the loan to buy, build or improve your home you…
Can deduct whole loan that year
Qualified residence interest:
Home equity indebtedness is the lesser of…2
1 $100,000 interest or
2 FMV - acquisition indebtedness
Investment interest exp, define
Borrow money to buy investments
Investment interest expense can be…
Deducted up to net investment income
Where are gross investment income expenses deducted?
Miscellaneous expenses (excess of 2% of AGI)
Qualified dividends and net long term capital gains are not considered…
2) unless…
Net investment income
2) elect to tax them at ordinary rate
For a charitable contribution in cash or property of $250 or more, to get deduction you must…
Get written acknowledge,net stating what they got from you
Cost of appraisal for charitable contribution can be…
Deducted under miscellaneous 2% itemized deductions
Charitable contributions:
Cash amounts donated…
Cannot exceed 50% of AGI
Charitable contributions:
Donate securities held over 12 months, your deduction is…
FMV up to 30% of AGI
Charitable contributions:
Donate securities held 12 months or less, your deduction is…
Adjusted basis limited to to 50% of AGI
Charitable contributions:
Donate securities declined in value, your deduction is…
Adjusted basis limited to 50% of AGI
Charitable contributions:
Tangible personal property (art), in which LT capital gain and donated to related industry (art museum) your deduction is…
FMV = 30% of AGI
Charitable contributions:
Tangible personal property (art), in which LT capital gain and donated to unrelated industry (Salvation Army) your deduction is…
Adjusted basis limited to 50% of AGI
If you elect adjusted basis, your limit will…
Go from 30% of AGI to 50% of AGI
Any charitable deduction that remains after maximum deduction is taken is…
Carried forward up to 5 years
Mortgage points:
If you did not use the money to buy, build or improve your home you must…
Amortize loan amount over its useful life
No deduction is used for prepaid interest, it must be…
Amortized and deducted over future periods
Personal interest…
No deduction is allowed for personal interest
Credit card interest, deductibility 2
1 not deductible for personal purchases
2 deductible for interest expenses
Qualified residence interest
Can deduct interest on primary and secondary residence
2 types of qualified residence interest
1 acquisition indebtedness
2 home equity indebtedness
Under Acquisition indebtedness, interest is…
Deductible up to $1 million
Acquisition indebtedness is interest of loans secured by residence if loans were used to…3
1 acquire
2 construct
3 substantially improve the home