1.) Nina includes the following expenses in her miscellaneous itemized deduction

Question

1.) Nina includes the following expenses in her miscellaneous itemized deductions before application of the 2% of AGI floor:

Annual investment management fee $3,700

Subscription to investment journals $300

Tax return preparation fee $1,500

Nina's AGI is $100,000. How much of the above-noted expenses will reduce her net investment income? a.) $5,500 b.) $4,000 c.) $3,000 d.) $3,500

2.) Which of the following situations will disqualify a taxpayer from taking a deduction for moving expenses? a.) Phyllis opens a coffee bar after moving from Seattle to San Francisco. She still owns the coffee br and lives in San Francisco 90 weeks after her move b.) Marva moves from Dallas to Washington D.C. in her job as an IRS agent. She is still working at the IRS Washington office after one year c.) Paul moves from Boston to Miami to start a new business selling t-shirts. The business is not successful and Paul returns to Boston after 52 weeks d.) Pam moves from Phoenix to Los Angeles to take a new job. She works at the Los Angeles job for 45 weeks before starting a new job in Las Vegas.

3.) Tanya is considering whether to rollover her traditional IRA to a Roth IRA. Factors important to consider include all of the following except? a.) expected tax rate after retirement b.) whether the current year's AGI will exceed $100,000 c.) current marginal tax rate d.) her age

Explanation / Answer

1) Total of Miscellaneous Itemized deductions( 3700+300+1500)=5500

Miscellaneous itemized deductions are subject to a 2% floor i.e a taxpayer can deduct amount of deductions that exceed 2% of total adjusted AGI

2% of 100000=2000

Deduction allowed = Total Deductions-2%(AGI)

5500-2000=3500

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