“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.
That sucks it's not shown in Becker since those are pretty common, however it might be overkill if they showed every single deduction. You can always check out the IRS publication on misc deductions.
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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