State income tax or state sales taxes thats why there

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State income tax or state sales taxes (that’s why there are people saving their receipt)SALT- also includes property taxes, personal property taxes (auto license fees)2017 and prior- no limitation; but in 2018, limited to $10,000 MFJ / $10,000 Single / $5,000 MFSSucks to live at San Francisco or New York with high property tax, high income tax, and high sales taxStates like NY hated it, and claims violates U.S. Constitution
Interest Expense - from AGIInterest expense paid by taxpayer on a loan related to qualified residence can be itemized deductionQualified residence = principal residence + second homeLimitation: Interest paid on acquisition indebtedness of $1,000,000 or less is deductible if incurred before 12/15/2017 or after 1/1/2026If incurred between 12/15/2017 - 1/1/2026, the limit is $750,000I.e. In 2017, Individual A + B buy a house for $3 million with $500,000 cash down and mortgage for $2.5 million. The mortgage interest is 5%. Annual interest is $100,000The I.D. is limited to ( $1,000,000 x 5%) = $50,000 onlyIf in 2018, the limit would be ($750,000 x 5%) = $37,500 onlySome other fees may be itemized deduction too
Interest Expense - from AGI (cont)Interest Expense paid by taxpayer on a loan related to a qualified residence can also be itemized deduction - home equity loanBut limited to lesser of:FMV of residence reduced by acquisition indebtedness, or $100,000Not deductible from 2018-2025 thoughInterest on most other indebtedness is not allowed as an itemized deduction though, unless is business related (business interest expense can be deduct via schedule C- for AGI)
Charitable Contributions - Itemized DeductionCharitable Contributions is deductibleMake sure the organization is qualified though - see 501(c)(3)Donations to your friend with zero bank balance does not countDefinition of charitable contribution- out of generosity, absence of consideration, intended to be a donationNo deduction allowed for the value of any benefit received back by the donor.For purchasing goods/services with charitable organization, the amount allowed for charitable deduction portion would be the price of the goods/services deduct the cost of the goods/services.Make sure understand the Singer Sewing Machine Co. & Apple case on Chapter 10 - slide 20 whether these companies’ donations can be deduct as charitable deduction. (On the exam- there’s no 100% right answer, make sure you state your argument)
Charitable ContributionFor business, if you donate a computer, you can either take the deduction for AGI (like schedule C) for the cost of the computer OR charitable contribution (if qualifies) of the FMV of the computer.There’s limitation on the charitable contribution, amounts limited can be carried over for 5 yearsAgain, valid evidence and records of valuation are very important!
TCJA-Eliminates Many Itemized Deductions for 2018The I.D. which were limited to the amount in excess of 2% of AGI for 2017 and prior - no deduction are allowed in 2018 through 2025.

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