Ch5 outline

Ch5 outline - CH 5 ITEMIZED DEDUCTIONS Six Major Categories...

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CH 5 – ITEMIZED DEDUCTIONS Six Major Categories on Schedule A o Medical o State and Local taxes o Interest o Charitable gifts [ceiling 50% of AGI] o Casualty losses [floor 10% of AGI] o Misc. deductions, including unreimbursed employee expenses Most itemized deductions are personal living expenses o Also unreimbursed employee business expenses and investment-related expenses DEDUCTIBLE MEDICAL EXPENSES o Net of insurance proceeds o Only amount in excess of 7.5% of AGI is deductible o Dependent Qualifications for Medical Expense Deduction Divorced parents? Dependent of both parents. The parent who pays gets the deduction. Gross income and joint return tests waived o Medical capital expenditures (therapeutic pool, elevator, etc) Can deduct only to the extent that the medical expenditure exceeds the increase in the FMV of the residence o Medicine and Drugs Must be prescribed Not illegal Must be FDA approved is from outside U.S. o
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Ch5 outline - CH 5 ITEMIZED DEDUCTIONS Six Major Categories...

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