Question

Which of the following expenses are classified as miscellaneous itemized deductions that are NOT subject to the 2% of AGI floor?

a. Tax return preparation fees
b. The unrecovered cost of a life annuity when the taxpayer dies
c. Gambling losses
d. Unreimbursed employee business expenses
e. Hobby expenses
f. Casualty and theft losses on property held for investment

Answer 1

Tax return preparation fees and casualty and theft losses on property held for investment are classified as miscellaneous itemized deductions that are not subject to the 2% of AGI floor.

Step-by-step explanation:

The expenses that are classified as miscellaneous itemized deductions that are NOT subject to the 2% of AGI floor are a. Tax return preparation fees and f. Casualty and theft losses on property held for investment.

Tax return preparation fees are deductible as a miscellaneous itemized deduction without being subject to the 2% floor. This means that you can deduct the full amount of your tax preparation fees from your taxable income.

Casualty and theft losses on property held for investment are also deductible as miscellaneous itemized deductions without being subject to the 2% floor. Losses due to theft, fire, storm, or other casualty events can be deducted from your taxable income without any limitations.