Chapter 5

CHAPTER 5 Itemized Deductions & Other Incentives Income Tax Fundamentals 2011 Gerald E. Whittenburg Martha Altus-Buller 2011 Cengage Learning

Learning Objectives ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Medical Expenses ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Medical Expenses ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Health Savings Accounts (HSA) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Medical Expenses Example ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Solution ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Taxes ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Income Tax Deduction Example ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Solution ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Real Estate Taxes ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Personal Property Taxes ,[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Tax Deduction Example ,[object Object],[object Object],[object Object],2011 Cengage Learning

Solution ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Overview of Interest ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Mortgage Interest ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Education Loan Interest ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Investment Interest ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Contributions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Contributions - Property ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Contributions – Property ,[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

LTCG Donation Example ,[object Object],[object Object],2011 Cengage Learning

Solution ,[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Contributions – Percentage Limitations ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Contributions to a 50% Organization 2011 Cengage Learning Cash 50% of AGI LTCG property (see next slide) STCG or ordinary income property Can deduct FMV less amount of gain that would’ve been recognized (the basis), then limited to 50% of AGI

Contributions to a 30% Organization Cash 30% of AGI LTCG property Cannot exceed 20% of AGI STCG or ordinary income property Can deduct FMV less amount of gain that would’ve been recognized (the basis), then limited to 30% of AGI 2011 Cengage Learning

Contributions 2011 Cengage Learning Order of charitable contribution deductions 1. Deduct 50% contributions 2. Deduct 30% contributions 3. Deduct 20% contributions Carryforward unused amounts to subsequent years Total of all 3 types of deductions still limited to AGI x 50%

Contributions - Substantiation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Donation of Vehicles ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Contribution Example ,[object Object],[object Object],2011 Cengage Learning

Casualty and Theft Losses ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Casualty and Theft Losses ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Miscellaneous Deductions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Miscellaneous Deductions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Limitation on Itemized Deductions and Exemptions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Qualified Tuition Programs (QTP) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

QTP ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Education Savings Accounts ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Higher Education Expense Deduction ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],2011 Cengage Learning

Chapter 5

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Chapter 5