Q. Write what do you think about the following: A. Many times you may need to ha
ID: 2584918 • Letter: Q
Question
Q. Write what do you think about the following:
A.
Many times you may need to have an appraisal to determine if the addition has increased the value.
The appraisal cost is deductible as an "other" miscellaneous itemized deduction, subject to the 2% of AGI limitation.
It is a cost paid to determine the proper tax, since you cannot know how much to deduct, and thus how much the proper tax to pay is, without the appraisal. The same would go for appraisals of items to be donated to charity, and appraisals to determine the proper casualty loss. Appraisals of property for immediate sale go to increase the basis, I believe, and appraisals for insurance or for obtaining a loan would not be deductible at all.
B.
Charitable contributions are also a large deduction item for some individuals. Why is it important to know what type of contribution the taxpayer has made? For examples, there are different limitations depending on cash versus non-cash. What are some others?
Explanation / Answer
B. Charitable contributions are tax deductible. In order to claim a charitable deduction on your tax return, you must itemize your deductions. To be deductible,charitable contributions must be made to qualified organizations.
In general, contributions to charitable organizations may be deducted up to 50 percent of adjusted gross income, but 20 percent and 30 percent limitations apply in some cases. The standard deduction for single taxpayers and married couples filing separately is $6,350 in 2017, up from $6,300 in 2016.
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