“Carter incurred the following expenses in the current year: $500 for the preparation of a personal income tax return, $100 for custodial fees on an IRA, $150 for professional publications, and $2,000 for union dues. Carter's current year adjusted gross income is $75,000. Carter, who is not self-employed, itemized deductions. What will Carter's deduction be for miscellaneous itemized deductions after any limitations in the current year?
* I'm using Becker and the book does not mention IRA custodial fees and union dues as misc. ID items. My question is, how do I know which to include as part of misc. ID? I asked Becker but did not receive a helpful answer.
I'm not sure if this is the answer you're looking for but I believe that the custodial fees on an IRA are investment expenses, which is one of the itemized deductions which are subject to the 2%-of-AGI exclusion. Then, union dues and subscriptions to professional publications are employee expenditures that are subject to 2%-of-AGI exclusion as well. I use Gleim and I found all 3 items are mentioned in the book so I'm rather surprised it's not included in Becker?
Included in Misc 2%:
Unreimbursed Employee Business Expenses
Tax Prep Fees
Expenses incurred in the production of income
The custodial fees would fall in the latter.
If you are studying for REG I find it useful to look at the actual tax forms. If you look at Schedule A it lists the common miscellaneous deductions as examples.
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