Question

Which of the following expenses are classified as miscellaneous itemized deductions for 2019?

1) Unreimbursed employee business expenses
2) The unrecovered cost of a life annuity when the taxpayer dies
3) Tax return preparation fees
4) All gambling losses
5) Casualty and theft losses on property held for investment

Answer 1

For 2019, miscellaneous itemized deductions have been largely eliminated but all gambling losses to the extent of gambling winnings and casualty and theft losses on property held for investment in a federally declared disaster are still potentially deductible.

Step-by-step explanation:

In 2019, the Tax Cuts and Jobs Act of 2017 significantly altered the landscape for itemized deductions. This included changes to miscellaneous itemized deductions, which were largely eliminated for the tax years 2018 through 2025. As a result, unreimbursed employee business expenses (Item 1), tax return preparation fees (Item 3), and other miscellaneous deductions that were subject to the 2% floor are not deductible. However, gambling losses (Item 4) are still allowable to the extent of gambling winnings, and casualty and theft losses (Item 5) are deductible only if they are attributable to a federally declared disaster.

Therefore, from the options provided, only all gambling losses (Item 4) and casualty and theft losses on property held for investment in a federally declared disaster (Item 5) would be potentially deductible in 2019.