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Itemized Deductions Limitations

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Bob, who is single had AGI of $400,000 in 2006. He incurred the following expenses & losses during the year.

Medical expenses before 7.5% of AGI limitation $39,500
State & local income taxes $5,200
Real Estate taxes $4,400
Home mortgage interest $5,400
Charitable contributions $4,800
Casualty loss before 10% limitation (after $100 floor) $47,000
Unreimbursed employee expense subject to 2%-of-AGI limit $8,900
Gambling losses (Charles had $7,400 of gambling income) $9800

Compute Bob's itemized deductions before & after the overall limitation.

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Solution Summary

The solution discusses each type of itemized deduction and what limits might apply.

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Single Bob has an AGI of $400,000

Itemized deductions are limited as follows:

Medical total of $39,500 - 30,000 (7.5% of AGI) = 9,500

No limitations on
State & local income taxes $5,200
Real Estate taxes $4,400
Home mortgage interest ...

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