1. 1) alimony payments
2. 1/2 self-employment taxes paid by self-employed taxpayers
3. medical insurance premiums paid by a self-employed TP for a TP who is not eligible to participate in an employer subsidized health plan
4.  long-term care premiums paid by self-employed individuals who are not eligible to participate in an employer subsidized TP
5. moving expenses
6. IRA (Keogh) contributions
7. interest on student loans
8. qualified higher education expenses
9. contributions to health savings accounts
10. attorney's fees and court costs for discrimination suits
11. educator expenses
12.  penalty for early withdrawal of savings
13. Domestic production activities deduction
14. forfeited interest on premature withdrawals
15. repayment of jury pay
16. expenses associated with reforestation
17. clean fuels expenses
18. performing arts expenses to the artist

may be claimed in lieu of itemized deductions (limit varies by filing status and are indexed for inflation)

1. single=$5,800
2. head of household= $8,500
3. Married-joint= $11,600
4. married-separate= $5,800

1. interest ON a maximum of $1 million of acquisition indebtedness can be deducted as itemized deduction if debt was used to purchase, construct, or improve the residence
2. interest on lower of $100,000 or the equity in the home (FMV-other mortgages) can be an itemized deduction regardless of how the proceeds were used

FMV is deductible as an itemized deduction, limited to 30% of AGI (limitation can be removed if TP elects to deduct the FMV reduced by the appreciation in the property)

1. if the tangible personal property donated isn't used for purpose it should be, TP's itemized deduction for it is limited to adjusted basis
2. if the contribution exceeds $5,000 and the donee sells the property within 3 years, TP must recapture the deduction to the extent it exceeds the basis in the property

• itemized deduction only if the items are in good used condition or better (socks and undergarments not allowed).  
• rule doesn't apply if value of a single item exceeds $500

• up to $100,000 of itemized deduction if contributed by an individual 70 years old or older

1. no deduction is allowed for a single contribution of $250 or more without written acknowledgement of the amount and purpose of contribution from the donee organization
2. contributions of cash arenot deductible unless the donor has a cancelled check, credit card statement, or written statement from charity
3. property >$500: description of property must be included
4. donations> $5,000: qualified appraisal required (unless cash, intellectual property, inventory, publicly-traded securities, or qualified vehicals)
5. property > $500,000, qualified appraisal must be attached to tax return (unless cash, intellectual property, inventory, publicly-traded securities, or qualified vehicals)

1. deduction is limited to 50% of AGI for aggregate contributions of cash combined with contributions of property
2. deductions for contributions of capital gain property "a" charities is 30% of AGI (ignoring cash)
3. deductions for contributions of capital gain property "b" charities is 20% of AGI (ignoring cash)
4. excess contributions: carryforward is 5 years

itemized deduction limited to:

lower of decline in FMV or AB of property

(less) insurance reimbursements

(less) $100 per casualty floor  

(less) 10% X AGI

• netted with casualty losses
• treated as a capital gain if net is still a casualty gain

• not an itemized deduction
• treated as a business loss deduction

• 2% of AGI is deducted from the aggregate amount of deductions subject to the floor
• excess deductions over the 2% floor are included with the other itemized deductions

1. employee expenses not reimbursed under an accountable plan
2. investment expenses (not including royalty or rental)
3. tax return preparation expenses
4. home office expenses of an employee
5. hobby expenses

1. appraisal fees to determine casualty loss 
2. legal fees to procure alimony

1. bond premium amortization on bonds purchased before October 23, 1986
2. repayments previously included in income under the claim of right docterine
3. remaining basis of terminated annuity
4. gambling losses to extent of winnings
5. work expenses of handicapped TP
6. estate taxes related to income in respect of a decedent
7. short sale expenses
8. expenses relating to cooperative housing corporations

1. employee business expenses are reimbursed under an accountable plan, reimbursement is not taxable and employee gets no deduction in the expense
2. expenses reimbursed, but not under an accountable plan, reimbursement included in income, and the deduction is a 2% miscellaneous itemized deduction
3. expenses not reimbursed by the employer, deduction is 2% miscellaneous itemized deduction

1. must substantiate all expenses to be reimbursed
2. excess reimbursements must be returned to the employer

• deductible when the primary purpose is business
• commuting home to work not deductible
• travel form job to job is deductible
• travel home to a temporary work location is deductible if short-term in nature

• reduced by 50% but deductible if employee is away from home overnight
• no deduction if meals are reimbursed

1. travel cannot be a form of business education (french teacher travels to france)
2. cost of companion is deductible if companion is an employee and serves a business purpose
3. no deduction is allowed for travel to "investment" seminars
4. significant restrictions are placed on deductions for conventions and seminars held on cruise ships in foreign countries

1. entertainment must involve a person with a business relation
2. substantial discussion must occur either before, during, or after the entertainment on same business day
3. deduction on tickets is limited to face value (before 50% disallowance)
4. written records must be kept
5. if entertainment is provided to employees as compensation or provided as advertising or marketing, no 50% reduction is made

1. dues for facilities and clubs for pleasure or recreation are not deductible
2. dues for public service clubs, professional organizations, and trade associations are deductible

1. not deductible if to meet minimum standards of current job or to qualify TP for a new trade or business
2. deductible if (a) to maintain or improve existing skills required in current job, or (b) to meet requirements of employer or imposed by law to retain employment status

1. asset must be totally worthless
2. must be a business asset
3. worthless asset is treated as being sold for nothing on last day of year

1. NOLs must be carried back to the two preceding tax years unless election is made to forgo.  carryforward is 20 years
2. NOLs are only allowed for business losses and casualty losses.  nonbusiness losses or expenses must be added back to the taxable loss to determine NOL

• generally equals its taxable loss for the tax year
• allowed to include the dividends received deduction in computing its net operating loss

1. personal exemptions
2. standard deductions or itemized deductions (except casualty loss), and other non-business deductions in excess of non-business income
3. NOL deduction from another year
4. excess of non-business capital losses over non-business capital gains (limited to $3000)

individual: deduction for AGI

corporation: regular business deduction

1. 2008 NOLs: elligible small business (less then $15 million gross receipts annually for 2006-2008) can carryback 5 years
2. 2008 and 2009 NOLs: can carryback 3,4,or 5 years (can't be made for both 2008 and 2009).  carryback to 5th year can't be more than 50% TP taxable income for that 5th preceding year.

• deductible as "2% miscellaneous" itermized deductions only to the extent that the activity generates revenues. (no hobby loss is deductible) 
• expenses are deducted in the following order: a) interest and taxes  b)cash expenses  c) depreciation 
• excess cannot be carried forward

1. if activity generates a profit in three out of five consecutive years, the IRS has the burden to prove that the TP has no profit motive in conducting the activity
2. if there are losses in three of the previous 5 years, the TP has burden to prove that the activity is a business

can be deducted for portion of residence used as an office if:

1. business use of the office is exclusive and regular
2. it is the principal place of business
3. if not principal place of business: used as ordinary place for meeting clients or for the administration of the business
4. if TP is an employee, office must be used for convenience of employer

1. expenses must be allocated between portion of the dwelling used as residence and as office
2. deductions are limited to income after non-office expenses.
3.  deductions are applied toward income in same order as hobby loss limit.
4. excess deductions carryforward and can be used in future years when business income is sufficient

1. personal residence
2. rental property
3. personal/rental property

• if rented for less than 15 days a year.
• rent income is excluded and mortgage interest and property taxes are deductible on schedule a

• rented for more than 15 days
• not used for personal purposes for more than the greater of (1)14 days or (2) 10% of the total days rented
• all rent is taxable, net of all regular rental expenses, pro-rated for % of rental days only
• rental loss allowable

• rented for 15 days or more
• used for personal purposes for more than the greater of (1) 14 days or (2) 10% of total days rented
• regualr expenses are pro-rated for % of rental days\rental loss not allowed
• expenses deducted in same order as hobby limits

• deduction of expenses is limited to the revenue produced by the business activity if the TP does not participate in the management of the activity
• expenses and revenues from passive activities are combined and the passive activity expenses in excess of revenues (passive loss) is suspended

• TP works more than 500 hours in the activity, or more than 100 hours if no other individual works more than 100 hours

1. limited partners and most rental activities are considered passive without regard to TP participation (except: car rentals, hotels, golf courses, and other activities where average rental time is seven days or less, or 30 days or less if significant personal servies are provided by the owner in connection with the rental)
2. real estate professionals: must perform more than 50% of his/her personal services in trades or businesses involving real property and must perform more than 750 hours of services in real property tades or business in which he/she materially participates