R2 - Adjustments and Itemized Deductions Flashcards Preview

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Flashcards in R2 - Adjustments and Itemized Deductions Deck (20):
1

What is the IRA contribution limit for 2014?

$5,500 (+ $1,000 for catch-up contributions if over 50)

2

What are the three requirements for moving expenses to be deductible?

New workplace 50+ more miles away
39 week stay
Only direct costs and reimbursements are not adjustable

3

T/F: Lodging expenses are adjustable as a moving expense

True

4

What are the two qualifications for an IRA contribution to be non-deductible?

Excessive AGI ($60K+) and active participation in another qualified plan

5

T/F: Being blind and/or over 65 entitles the taxpayer to another exemption

False; it entitles the taxpayer to an increased standard deduction

6

What is the maximum itemized deduction phase-out (i.e. what percentage is the minimum that will be allowed)?

Reduced by 3%, up to 80% (of the itemized deductions will be allowed)

7

What are the four items that are not affected by the itemized deduction limitation?

GIMC
Gambling losses
Investment interest expense
Medical expenses
Casualty and theft losses

8

T/F: Real estate taxes do not include street, sewer or sidewalk assessments

True

9

What are the three types of nondeductible taxes (for itemized deductions)?

FIB
Federal taxes
Inheritance taxes
Business/rental property

10

What are the percentage deduction limits for cash and FMV property contributions?

Cash = 50% of AGI
FMV property = 30% of AGI

11

T/F: Long-term appreciated property is limited to the lesser of basis or FMV

False; the limitation to basis or FMV is for most property (but appreciated LT property is deductible @ FMV)

12

How long may excess charitable contributions be carried over?

5 years

13

What is the limitation for casualty and theft loss and what are the qualifications?

10% of AGI + $100 per event; also, it must be sudden and unexpected and must submit an insurance claim

14

How much income under a nonaccountable plan for business expense reimbursement is included in taxable income?

100%

15

For how many years may student interest be deducted?

Indefinitely as long as actual paid (also may not exceed $2,500 annually)

16

T/F: Half of meal expense is deductible for moving expenses

False; none is deductible

17

T/F: The deduction by an individual taxpayer for interest on investment indebtedness is limited to the taxpayer's net investment income for the year

True; (investment income - investment expenses (other than interest) = net investment income

18

How much is deductible per year for gifts (per individual recipient)?

$25, subject to 2% (if unreimbursed employee expense)

19

T/F: Expenses for wigs for a chemotherapy patient are deductible as a medical expense

True

20

T/F: Medical expenses paid on behalf of another person who is not your dependent

True, only if the reason they are not the dependent is due to their AGI or joint return filing status