If T uses a home equity loan instead to purchase the vacation home, the interest would be deductible as an
itemized deduction rather than a rental expense (assuming T has no other home equity interest expense and he does not elect out of the home equity debt treatment).
The ALJ reasoned that the ordering convention resulted in a double disallowance of the taxpayer's
itemized deduction for state and local income taxes because it required the add back of the entire amount of state and local taxes although the Federal deduction had already been limited by the IRC section 68 limitation.
If your
itemized deductions hover around the same level as the standard deduction, "bunch" or aggregate deductions in a year that you itemize and take the standard deduction the following year.
In NOL creation years, a taxpayer's AGI is usually low; consequently,
itemized deductions subject to an AGI floor are generally more fully deductible than would normally be the case (e.
The amount of the reimbursement is not included in income and there is no AMT adjustment for the related expenses since they are not deducted as miscellaneous
itemized deductions.
A theft loss is excluded from the phase-out of
itemized deductions required by Sec.
63c(6)(A) says that if one of them uses
itemized deductions, the other one has a zero standard deduction.
Unfortunately for taxpayers the law treats the deduction as a miscellaneous
itemized deduction subject to the 2% of AGI floor.
7) If the loss does not meet one of these criteria, it is deductible as a miscellaneous
itemized deduction.
Between 1990 and 2001, the number of tax returns claiming
itemized deductions increased by 38.
