Itemized Deductions Remaining.

UNLESS these add up to more than $12,000 (individual)

(1) SALT; (6) BELOW THE LINE or 24,000 (married); TAKE THE STANDARD
(2) Residential Mortgage Interest; Itemized Deductions. DEDUCTION.
(3) Medical Expenses; If a business owner -> check out your other deductions.
(4) Charitable COntribution Deductions. [For Employees & Non-Business Owners]

(1) SALT - §164. (2) §163(h) - Qualified Residential Mortgage Interest.

Taxpayer may deduct UP TO $10k hard limit (for
both individuals and married) of state and local taxes May deduct interest PAID or ACCRUED in the current taxable year, on a Acqusition Debt, for a
paid or ACCRUED during TxYr. qualified residential property. [Only for 750k of debt principal total]
Qualifying Debt: Acquisition Debt Qualifying Residences
Only §163(h)(D)(4)
164(a) -> Qualifying Sales Tax
NOTE: May only
Taxes Election
Debt incurred in acquiring, Both (1) principal residence of the deduct interest
(1) State/local & foreign §164(a)(5)(A).
constructing, or substantially taxpayer per sec 121; and payments/accrual
real prop taxes; imporiving a qualified residence. (2) 1 other residence of TP against investment
(2) State/local personal Instead of
INCOME & selected by TP for purposes of income. §163(d)(1).
prop taxes (ie car tax); ONLY up to 750k per tax period this subsection AND is But does carry over
tax, may
(3) State/loca & foreign (not total deduction; total principal sometimes used as residence [for for the NEXT year.
instead take
INCOME taxes (war profit whose interest may be at least 14 days OR 10% ratio to
deduction
+ excessive profit too); deducted.). times rented, whchvr gr&r]
for state
and
and local
(4) GST imposed on SALES
income dstirbutins. TAX.
(4) Charitable Contribution Deduction - §170
TP may deduct up to 60% of "contributino base" if donating to a valid charity.

LIMIT: Max Deduction = $10,000 yr

(1) Valid Recipients (2) Deduction Limits & REDUCTION

(c)(1) State or Local Gov't. If gift is for (a)(i) Individuals: (a)(ii) Corps:
(3) - §213. Medical Expenses
exclusivley public purposes Contribution Base = AGI ; Capped at 10%
May deduct qualified medical expenses so long as
they fill 7.5% AGI tipping basket; and minus limit to 60% [If b/yd cap, of taxable
(c)(2) Corp., Trust, or Foundation.
expenses paid BY insurance. carryover excess for 5 yrs.] income.
IF -> (A) [US Based] created in the US;
(B) [Valid Purpose] operated and
organized exclusively for religious, (b) Reduce By [Minor] Quid Pro Quo.
Qualified Expenses §213(d)(1)
scharitable, scientific, literary, or -> If TP recieves consumptive benefit, must
(A) [Actual Treatment] for diagnosis, cure, educaitonal purpose (or foster amateru reduce charity deduction by the FMV of the
mitigation, treatment, or prevention of diseas, sports competition oterh than buying gear), benefit.
or for the purpose of affecting any structure or OR prevention of cruelty to animals; Exception: If the benefit is the same benefit
function of the body; (C) [no private benefit] -> no benefit may entire public gets, then NO QPQ.
(B) [Essential Transportaiton] Transport go to private shareholder or individual
primarily for AND essential to medical care beyond public benefit; §6115 Prophylactic: If quid pro quo value (NOT
(A); AND (d)[No politics] Group may NOT total gift value) is > $75, charity must provide a
(C) 'qualified long term service'; AND lobby or make political donatinos. written statement that only the PORTION not
(D) health isnurance (but b/c of tipping basket quid pro quo may be deducted.
PLUS itemized, most won't take)
For Example: If donate a (c) [If a busines, does not apply to reg taxpayers] SUBSTANTIAL
DIS-qualified: ASK: Is there an plot of land, in exchange for BENEFIT Doctrine:
Things not element of personal If Sub. Ben -> disqual from charity [Bus. should recharacterize as a
continued use of land (share
ACTUALLY, consumption which the with school, but no other consumption expense.]
PHYSICALLY questionalbe "expense" Defined: When donor recieves (or anticipates recieving) a substantial
users) then the
necessary for simply eases? If so contribuiton is NOT benefit beyond that of the general public for charitable purposes such
healing -- and FAILS.
deductible under 170. that contrib. to gen. pub. is merely incidental.
borderline [having a yard is
consumption. . consumption; having BIG NOTE: When det. 170, look to BOTH (1) TP's subjective intent & (2) objective nature of transction.
(a) Boarding school kids is consumption
for kids NO.; decision --> if you dont
(b) lawn mower for NEED for life, probs
old guy NO; not medical] Contributions of Capital Gain/ Property Stuff. page 57 of the outline.