Chapter 10Itemized Deductions (slide 1 of 2)Itemized Deductions (slide 2 of 2)Medical Expenses (slide 1 of 6)Medical Expenses (slide 2 of 6)Medical Expenses (slide 3 of 6)Medical Expenses (slide 4 of 6)Medical Expenses (slide 5 of 6)Medical Expenses (slide 6 of 6)Nursing Home ExpendituresSpecial School ExpendituresCapital Medical ExpendituresCapital Improvement to HomeMedical Care of Spouse and DependentsMedical Transportation and LodgingHealth Insurance PremiumsReimbursement by Medical InsuranceExample of Medical Reimbursements (slide 1 of 2)Example of Medical Reimbursements (slide 2 of 2)Medical Savings Accounts (slide 1 of 2)Medical Savings Accounts (slide 2 of 2)Taxes (slide 1 of 4)Taxes (slide 2 of 4)Taxes (slide 3 of 4)Taxes (slide 4 of 4)Interest ExpenseInterest on Qualified Education LoansInvestment Interest (slide 1 of 5)Investment Interest (slide 2 of 5)Investment Interest (slide 3 of 5)Investment Interest (slide 4 of 5)Investment Interest (slide 5 of 5)Qualified Residence Interest (slide 1 of 4)Qualified Residence Interest (slide 2 of 4)Qualified Residence Interest (slide 3 of 4)Qualified Residence Interest (slide 4 of 4)Interest Paid For Services (slide 1 of 2)Interest Paid For Services (slide 2 of 2)Charitable Contributions (slide 1 of 3)Charitable Contributions (slide 2 of 3)Charitable Contributions (slide 3 of 3)Contribution of ServicesRecord-Keeping RequirementsOrdinary Income PropertyCapital Gain PropertyExceptions to FMV Deduction of Capital Gain Property (slide 1 of 2)Exceptions to FMV Deduction of Capital Gain Property (slide 2 of 2)Example of Contributions of Tangible PersonaltyCharitable Contribution Limitations (slide 1 of 4)Charitable Contribution Limitations (slide 2 of 4)Charitable Contribution Limitations (slide 3 of 4)Charitable Contribution Limitations (slide 4 of 4)Charitable Contributions CarryoverExample of Charitable Contribution AGI LimitsMiscellaneous Itemized DeductionsMisc. Itemized Deductions Not Subject to 2% of AGI FloorOverall Limitation on Itemized Deductions (slide 1 of 3)Overall Limitation on Itemized Deductions (slide 2 of 3)Overall Limitation on Itemized Deductions (slide 3 of 3)PowerPoint PresentationChapter 10Chapter 10Deductions and Losses:Certain Itemized DeductionsDeductions and Losses:Certain Itemized DeductionsCopyright ©2004 South-Western/Thomson LearningCopyright ©2004 South-Western/Thomson LearningEugene Willis, William H. Hoffman, Jr.,Eugene Willis, William H. Hoffman, Jr.,David M. Maloney and William A. RaabeDavid M. Maloney and William A. RaabeC9 - 2Itemized Deductions(slide 1 of 2)Itemized Deductions(slide 1 of 2)•Personal expenditures that are deductible FROM AGI as itemized deductions include: –Medical expenses–Taxes–Interest–Charitable Contributions–Miscellaneous itemized deductions•Personal expenditures that are deductible FROM AGI as itemized deductions include: –Medical expenses–Taxes–Interest–Charitable Contributions–Miscellaneous itemized deductionsC9 - 3Itemized Deductions(slide 2 of 2)Itemized Deductions(slide 2 of 2)•Itemized deductions provide a tax benefit only to extent that, in total, they exceed the standard deduction amount for the taxpayer•Itemized deductions provide a tax benefit only to extent that, in total, they exceed the standard deduction amount for the taxpayerC9 - 4Medical Expenses (slide 1 of 6)Medical Expenses (slide 1 of 6)•Expenditures for the diagnosis, cure, mitigation, treatment, prevention of disease, or for purpose of affecting any structure or function of the body of the taxpayer, spouse, or dependents–Includes prescription drugs and insulin•Expenditures for the diagnosis, cure, mitigation, treatment, prevention of disease, or for purpose of affecting any structure or function of the body of the taxpayer, spouse, or dependents–Includes prescription drugs and insulinC9 - 5Medical Expenses (slide 2 of 6)Medical Expenses (slide 2 of 6)•Does not include the cost of items such as :–Elective cosmetic surgery–General health items–Nonprescription drugs•Does not include the cost of items such as :–Elective cosmetic surgery–General health items–Nonprescription drugsC9 - 6Medical Expenses (slide 3 of 6)Medical Expenses (slide 3 of 6)•Medical expenditures are deductible in year paid –Includes payment by check or credit card•Medical expenditures are deductible in year paid –Includes payment by check or credit cardC9 - 7Medical Expenses (slide 4 of 6)Medical Expenses (slide 4 of 6)•Medical expenses are deductible to the extent unreimbursed medical expenses, in total, exceed 7.5% of AGI•Medical expenses are deductible to the extent unreimbursed medical expenses, in total, exceed 7.5% of AGIC9 - 8Medical Expenses (slide 5 of 6)Medical Expenses (slide 5 of 6)•Example of medical expense deduction limitation:–Amy has AGI of $10,000 and medical expenses of $1,000–Amy’s medical expense deduction = $250[$1,000 - ($10,000 x 7.5%)]•Example of medical expense deduction limitation:–Amy has AGI of $10,000 and medical expenses of $1,000–Amy’s medical expense deduction = $250[$1,000 - ($10,000 x 7.5%)]C9 - 9Medical Expenses (slide 6 of 6)Medical Expenses (slide 6 of 6)•Example of medical expense deduction limitation:–Bob has AGI of $4,000 and medical expenses of $1,000–Bob’s medical expense deduction = $700[$1,000 - ($4,000 x 7.5%)]•Example of medical expense deduction limitation:–Bob has AGI of $4,000 and medical expenses of $1,000–Bob’s medical expense deduction = $700[$1,000 - ($4,000 x 7.5%)]C9 - 10Nursing Home ExpendituresNursing Home Expenditures•If primary reason for being in nursing home is medical, costs (including meals and lodging) qualify•If primary purpose of placement in home is personal, only specific medical costs qualify (no meals or lodging)•If primary reason for being in nursing home is medical, costs (including meals and lodging) qualify•If primary purpose of placement in home is personal, only specific medical costs qualify (no meals or lodging)C9 - 11Special School ExpendituresSpecial School Expenditures•If primary purpose of placement in school is medical, costs (including meals, lodging, and tuition) qualify as medical expenses•If primary purpose of placement in school is personal, only specific medical costs qualify (no meals or lodging)•If primary purpose of placement in school is medical, costs (including meals, lodging, and tuition) qualify as medical expenses•If