Quiz 5: Itemized Deductions

For medical expenses,only expenses in excess of 7.5 percent of adjusted gross income are deductible.

In 2013,Roxanne's nephew was her dependent.For 2014,he no longer qualifies as her dependent.However,she paid $650 in 2014 for medical expenses she incurred in 2013 when he was her dependent.Roxanne can include the $650 in figuring her medical expense deduction in 2014.

The cost of aspirin and over-the-counter cough medicine is a deductible medical expense even though they are nonprescription drugs.

Prescription drugs obtained outside the United States,such as from Canada,are never deductible on a U.S.tax return.

Premiums paid for long-term care insurance policies may be deductible as medical expenses.

A taxpayer generally has the option of deducting foreign taxes paid on Schedule A or taking a foreign tax credit.

Personal property taxes paid on personal-use assets,such as the family car,are deductible on Schedule A.

Taxpayers can deduct qualified residence interest on their principal residence and on a second residence selected by the taxpayer.

Loan fees that are not "points",or prepaid interest,are deductible as interest on Schedule A.

Rick and Claudia live in an apartment and have purchased land where they plan to build their home.They have a mortgage on the lot and have received a Form 1098 from the lender showing the interest paid on the note.Interest paid on this loan is deductible as home mortgage interest on their Schedule A.

In order to deduct a charitable contribution,taxpayers must itemize on their return.

Cynthia makes weekly cash contributions of $30 to her church.She pays by check.Since her annual contributions to the church are more than $250,she must obtain a written acknowledgment from the church to support her contribution deduction.

Individual taxpayers may carry forward for five years charitable contributions that are not allowed as a deduction in the current year due to the adjusted gross income limitation.

If donated appreciated capital gain property is put to a use that is unrelated to the purpose or function of a charity's tax-exempt status,the contribution must be reduced by the amount of any long-term capital gain that would have been realized if the property had been sold at its fair market value at the time of the contribution.

A taxpayer receives a deduction for services rendered to a charitable organization.

Theft losses are deducted in the tax year in which the theft was discovered,rather than the year of theft,if the discovery comes later.

Personal casualty losses resulting from termite damage are deductible.

For determination of deductibility,all personal casualty losses incurred during the year are added together and only one $100 floor amount is used to reduce the casualty deduction.

In 2014,Alan was required by his employer to use his car for work.His employer's mileage reimbursement was $0.25 per mile.If Alan's actual expenses are more than the reimbursement,he can deduct the excess amount on Schedule C

If an accountant in public accounting seeks work as a controller in private industry,the expenses of job hunting may be deductible.

For 2014,high-income taxpayers do not have to forfeit part of their itemized deductions.

In the past,high-income taxpayers' itemized deductions have been reduced by the lower of 3% of the excess of AGI over the applicable amount or 80% of the itemized deductions otherwise allowable for the tax year.For 2014,this limitation on the amount of itemized deductions for high-income taxpayers is back in effect.

Which of the following may not be deducted either totally or partially as medical expenses? (Disregard any limitations which may apply.) A)$3,000 to a family physician for medical care. B)$1,000 long-term care insurance. C)$600 for eyeglasses. D)$300 for maternity clothes.

During 2014 Shakira paid the following expenses: What is the total amount of medical expenses (before application of the adjusted gross income limitation)that would enter into the calculation of itemized deductions on Shakira's 2014 income tax return? A)$ 525. B)$1,325. C)$1,500. D)$1,575.

Which of the following expenses is not deductible as medical expense? A)Insulin used for diabetes. B)Wig purchased upon the advice of a physician for the mental health of a patient who has lost all of his/her hair from disease. C)Swimming lessons,recommended by a doctor for improvement of general health. D)Acupuncture used to treat migraines.

Maria is single and age 32.In 2014,she had AGI of $35,000.During the year,she incurred and paid the following medical costs: What is Maria's medical expense deduction (after application of the adjusted gross income limitation)for her 2014 tax return? A)$3,500. B)$3,215. C)$2,615. D)$ 0.

Which of the following costs are deductible on Form 1040,Schedule A,as taxes? 1.Real estate taxes on property owned in Mexico. 2)Property tax portion of vehicle registration,based on the value of the auto. 3)Fine for speeding. 4)Personal property tax on a pleasure boat. A)1,2,and 4. B)3 and 4. C)None of the items are deductible. D)All of the items are deductible.

Taxes deductible as an itemized deduction include all of the following except: A)Personal property taxes based on the value of the property. B)Taxes that the taxpayer paid on property owned by his/her parents or children. C)State and local income taxes. D)Real estate taxes based on the assessed value of the property.

Cynthia lives in California,a state that imposes a tax on income.The following information relates to Cynthia's state income taxes for 2014: Taxes withheld in 2014 $3,000 Refund received in 2014 from 2013 tax return 300 Assessment paid in 2014 on the 2012 tax return 800 Assuming she elects to deduct state and local income taxes,what amount should Cynthia use as an itemized deduction for state and local income taxes for her 2014 federal income tax return? A)$1,100. B)$2,700. C)$3,800. D)$4,100.

For investment interest expense in 2014,the deduction by a taxpayer is: A)Limited to the investment interest expense paid in 2014. B)Limited to the taxpayer's net investment income for 2014. C)Not limited. D)Limited to the taxpayer's gross investment income for 2014.

For 2014,Jorge,a single father,reported the following amounts relating to his investments: Net investment income from interest $7,000 Interest expense on a loan to purchase stocks 2,000 Interest expense on funds borrowed in 2013 to purchase land for investment 6,000 What is the maximum amount that Jorge can deduct in 2014 as investment interest expense? A)$1,000. B)$2,000. C)$6,000. D)$7,000.

Which of the following interest expenses incurred by Amanda is treated as personal interest expense and,therefore,not deductible as an itemized deduction? A)Interest expense on personal credit cards. B)Bonds purchased with accrued interest. C)Interest on a home mortgage acquired in 2005. D)Interest expense incurred by a partnership in which Amanda is a limited partner.

Some contributions are limited to 50% of the taxpayer's AGI,others may be limited to a lower % of AGI.Deductions to which of the following organizations are subject to the 50% limitation on deductible contributions? A)Churches and conventions of organizations of churches and educational organizations. B)Hospitals and certain medical research organizations associated with these hospitals. C)Rotary,Elks,and Lions Clubs who raise money for public causes. D)Both a and b.

Which of the following organizations do not qualify for deductible charitable contributions? A)The Red Cross. B)A political party. C)Religious organizations. D)All of the above.

For the current year,Sheila Jones had adjusted gross income of $100,000.During the year,she contributed $6,000 to her church and an additional $3,000 to qualified charities.She also contributed religious artwork with a fair market value of $60,000 and a basis of $20,000 to her church.The church intends to display the religious artwork in the church foyer.If Sheila chooses to itemize her deductions,what is the amount of her deductible charitable contribution? A)$ 9,000. B)$20,000. C)$39,000. D)$49,000.

Using the information in question 41,what is the amount of the charitable contribution carry forward for Sheila Jones? A)$30,000. B)$20,000. C)$10,000. D)$ 0.

If one or more non-cash gifts has a fair market value over $500,the taxpayer must: A)Attach a written explanation to the Form 1040. B)Complete Schedule D. C)File Form 8283. D)Attach a letter from the recipient organization.

Abel's car was completely destroyed in an accident that was his fault.His loss was $8,500 and his insurance company reimbursed him $6,500.What amount of casualty loss can Abel claim on his return (before deduction limitations)? A)$ 0 B)$2,000 C)$6,500 D)$8,500

In 2014,the Chens' pleasure boat was severely damaged by a hurricane in an area that was declared a federal disaster area.They had AGI of $110,000 in 2014.The following information relates to the craft: The Chens had insurance and received an $80,000 insurance settlement. What is the allowable casualty loss deduction for the Chens in 2014? A)$50,000. B)$15,000. C)$ 3,900. D)$ 3,000.

In 2014,the U.S.President declared a federal disaster in California due to wild fires.Helen lives in the affected area and lost her home in the fires.What choice does she have regarding when she can claim the loss on her tax return? A)It must be claimed in 2013 if the return has not been filed by the date of the loss. B)It must be claimed in 2014 if the loss is greater than Helen's modified adjusted gross income. C)It may be claimed in 2015 if an election is filed with Helen's 2014 return. D)It may be claimed in either 2013 or 2014.

In 2014,Allen's pleasure boat was destroyed by a flood.He had purchased the boat in 2011 for $45,000.On what form(s)will Allen report this loss? A)Form 4684,Casualties and Thefts,and Schedule A,Itemized Deductions. B)Form 4684,Casualties and Theft,and Schedule D,Capital Gains and Losses. C)Form 4797,Sales of Business Property and Involuntary Conversions,and Schedule D,Capital Gains and Losses. D)On the first page of Form 1040.

Which of the following miscellaneous deductions are subject to the 2% of adjusted gross income limitation? A)Unreimbursed employee business expenses. B)Investment counsel and advisory fees. C)Safe deposit box fees. D)All of the above.

Which of the following expenses is deductible,but subject to the 2% limitation on Form 1040,Schedule A,Job Expenses and Most Other Miscellaneous Itemized Deductions? A)A blue suit for an accountant. B)Appraisal fees on the sale of a personal residence. C)Uniforms for a UPS delivery person. D)The cost of hauling tools to work in the trunk of a car.

Which of the following miscellaneous itemized deductions is not subject to the 2% of adjusted gross income limitation? A)Unreimbursed employee business expenses. B)Gambling losses up to the amount of gambling winnings. C)Union or professional dues and subscriptions. D)Tax return preparation fees.

How is the medical expense deduction calculated? How is it limited?

Describe the concept of a 10% floor for medical deductions.

When are travel costs deductible as medical costs? How are medical travel costs calculated?

What is the proper treatment for prescription drugs obtained from sources outside the United States,such as Canada,that have been prescribed by a physician for the treatment of a medical condition and the FDA has approved that they can be legally imported?

What are four major categories of deductible taxes for individual returns?

In order for a personal property tax to be deductible as an itemized deduction,what three tests are required?

What is qualified residence interest? Are there any limits to the deductibility of qualified residence interest?

What is home equity indebtedness and how does it differ from acquisition indebtedness? Are there any limits to the deductibility of home equity loan interest?

Donations to what types of organizations are tax deductible?

If the donation is greater than $250,what kind of written acknowledgment must the taxpayer obtain from the recipient organization?

Explain the key exception to the general rule concerning the charitable deduction for the contribution of tangible personal property.

What are the general limits or floors placed on deductible personal casualty losses?

How does the declaration of a federally declared disaster area benefit the taxpayer concerning a casualty loss?

On April 3rd,Megan discovers that her diamond broach has been stolen.The broach had a fair market value and adjusted basis of $15,000.The broach was not covered by Megan's insurance policy and her adjusted gross income for the year was $65,000.What would be her casualty loss deduction for the year?

What is usually the largest miscellaneous itemized deduction category? Does it require any special treatment?

Explain the change in the tax treatment regarding the limitation of itemized deductions for high-income taxpayers. The high income limitation on itemized deductions was phased out from 2006 through 2009.For 2014,this limitation on the amount of itemized deductions for high-income taxpayers is back in effect.High-income taxpayers' itemized deductions will be reduced by the lower of 3% of the excess of AGI over the applicable amount or 80% of the itemized deductions otherwise allowable for the tax year.

The interest paid on a loan used to acquire municipal bonds is deductible as investment interest expense.

Taxpayers must itemize their deductions to be allowed a charitable contribution deduction.

The adjusted gross income limitation on casualty losses is 7.5 percent.

The standard business mileage rate for automobiles for all of 2014 is 56 cents per mile.

Generally,the taxpayer may deduct the cost of medical expenses on Schedule A for which of the following? A)Doctor prescribed birth control pills. B)Controlled substances like marijuana that are in violation of federal law. C)Trips for general health improvement. D)Marriage counseling.

In 2014,Maria who is 43,had adjusted gross income of $27,000,paid the following medical expenses: Prescription medicines $275 Dentist and doctor expenses 1,350 Health insurance premiums 400 Two pair of eyeglasses 185 What amount can Maria deduct as medical expenses (after the adjusted gross income limitation)in calculating her itemized deductions for 2014? A)$2,710. B)$2,025. C)$ 685. D)$ 0.

The threshold amount for the deductibility of allowable medical expenses for those under 65 in 2014 is: A)10% of AGI. B)10% of taxable income. C)7.5% of AGI. D)7.5% of taxable income.

Which of the following costs are potentially deductible on Form 1040,Schedule A as taxes for 2014? 1.Property tax on principal residence. 2)Garbage pickup itemized on the real estate bill. 3)Real estate tax on property owned as an investment. A)None of the items. B)2 and 3. C)1 and 3. D)All of the items.

Shanika lives in California which imposes a state tax on income.For 2014,Shanika had the following transactions related to her state income taxes: State taxes withheld in 2014 $3,500 Refund received in 2014 of 2013 tax 600 Assessment paid in 2014 of 2013 tax 750 Shanika plans to itemize on her 2014 return.What amount of state and local taxes should Shanika deduct in calculating itemized deductions for her 2014 federal income tax return? A)$ 750. B)$3,500. C)$4,250. D)$4,850.

Juan paid the following amounts of interest in 2014: $150 on his personal credit card $9,500 on his home mortgage $750 on a personal car loan,which was not used for business $350 on funds borrowed to purchase tax-exempt securities What is his deductible interest for 2014? A)$ 350. B)$1,250. C)$9,500. D)$9,850.

What is the maximum amount of personal residence acquisition debt on which interest is fully deductible? A)$1,000,000. B)$ 500,000. C)$ 250,000. D)$ 0.

Marty and Cindy are married and both are professors at a local college.They contribute money to various organizations each year and file a joint return.Their adjusted gross income for 2014 is $100,000.They contributed to the following organizations in 2014: • $3,500 to the Sierra club • $10,000 to the Red Cross • $2,000 to a local political candidate • $11,000 to cancer research foundation • Donated clothing to Goodwill.(Marty purchased The items for $850,but the thrift shop value of the Same items at a local second-hand store is equal to $60.) How much can Cindy and Marty deduct as charitable contributions for the year 2014? A)$26,560. B)$26,500. C)$25,710. D)$24,560.

Which of the following organizations qualify for deductible charitable contributions? A)Churches. B)State political organizations. C)Both a and b. D)None of the above.

Which of the following statements is true regarding documentation requirements for charitable contributions? A)If the total deduction for all noncash contributions for the year is more than $500,Section A of Form 8283,Noncash Charitable Contributions,must be completed. B)A noncash contribution of less than $250 must be supported by a cancelled check,or a receipt,or other written acknowledgement from the charitable organization. C)A contribution charged to a credit card is considered a cash contribution for purposes of documentation requirements. D)All of the above are true.

In 2014,the U.S.President declared a federal disaster due to the flooding in North Carolina.Dan lives in that area and lost his home in the flood.What choice does he have regarding when he can claim the loss on his tax return? A)It must be claimed in 2013 if the return has not been filed by the date of the loss. B)It must be claimed in 2014 if the loss is greater than the modified adjusted gross income. C)It may be claimed in 2015 if an election is filed with the 2014 return. D)It may be claimed in 2013 or 2014.

Malika and Henry's vacation home was completely destroyed by fire.They had no insurance to the cover the loss.On which of the following forms would they report their loss? A)Form 4684,Casualties and Thefts,and Form 1040,US.Individual Income Tax Return,as an adjustment to gross income. B)Schedule A,Itemized Deductions,only. C)Form 4684,Casualties and Thefts,and Schedule A,Itemized Deductions. D)Form 4684,Casualties and Thefts,only.

The Frazins had adjusted gross income of $140,000 in 2014.During the year,their principal residence was severely damaged by a house fire.The pertinent financial information is as follows: Cost basis = $134,000 Value before casualty = $156,000 Value after casualty = $20,000 The Frazins had some insurance and in 2014 reached a settlement with the insurance company for $110,000 insurance settlement.What is their allowable casualty loss deduction for 2014? A)$ 9,900. B)$23,900. C)$36,000. D)None of the above.

Which of the following is deductible as a miscellaneous itemized deduction? A)Job-hunting expenses. B)Union dues. C)Professional dues and subscriptions. D)All of the above are considered miscellaneous deductions.

The cost of a chiropractor's services does not qualify as a medical deduction.

Premiums paid for long-term care insurance are not deductible as medical expenses.

In 2014,federal income taxes may not be deducted as an itemized deduction on Schedule A.

Taxes assessed for local benefits,such as a new sidewalk,are deductible as real property taxes.

For purposes of computing the deduction for qualified residence interest,a qualified residence includes the taxpayer's principal residence and one other residence of the taxpayer or spouse.

Melissa earned net investment income of $11,000 during 2014 and incurred investment interest expense of $3,000 during the year related to a stock purchase.She incurred other investment interest expenses of $7,000 during the year.Melissa is limited to a deduction of $3,000 of investment interest expense in 2014.

On December 31,2014,Roger charged a $1,800 contribution to a qualified charitable organization to his credit card.He will not pay the credit card bill until January 2015.The $2,200 contribution is deductible on Roger's 2014 tax return.

Moesha paid $60 for Girl Scout cookies and $50 for Cub Scout cracker jacks.Moesha may claim the full $110 as a charitable contribution deduction.

If a taxpayer's personal property is completely destroyed,the casualty loss deduction is still reduced by a required floor amount.

Unreimbursed employee business expenses for travel qualify as itemized deductions subject to the 2% floor.

Itemized deductions are first reported on: A)Form 1040. B)Schedule B. C)Form 2106. D)Schedule A.

To qualify for a medical expense deduction as taxpayer's dependent,a person must be a dependent either at the time the medical services were provided or at the time the expenses were paid.A person generally qualifies as a dependent for purposes of the medical expense deduction if the person: A)Would qualify as a dependent except for the amount of gross income. B)Was a foreign student staying briefly at taxpayer's home. C)Is an unmarried adult child of taxpayer's sibling. D)Is the unrelated caregiver for taxpayer's elderly parents.

Tyrell,who is 45,had adjusted gross income of $35,000 in 2014.During the year,he incurred and paid the following medical expenses: Drugs and medicines prescribed by doctors: $1570 Health insurance premiums: 825 Doctor and dentist fees: 1,850 Hearing aid: 275 Tyrell received $600 in 2014 as a reimbursement for a portion of the doctors' fees.If he were to itemize his deductions,what would be his allowable medical expense deduction after the adjusted gross income limitation is taken into account? A)$ 420. B)$1,020. C)$3,920. D)$4,520.

During 2014,Carlos paid the following expenses: Prescription medications $640 Aspirin,vitamins,and cold medicine 165 Hospital and treatment fees 1,050 Health insurance premiums 250 What is the total amount of medical expenses (before considering the limitation based on adjusted gross income)that would enter into the calculation of itemized deductions on Carlos's 2014 income tax return? A)$ 0. B)$1,885. C)$1,940. D)$2,105.

Adrian,an NFL running back,is advised by his physician to install a Jacuzzi in his residence since he is afflicted with a back problem incurred after years of running into linebackers.The cost of installing the Jacuzzi is $6,500.He installs the Jacuzzi in January of 2014,and it increases the value of his residence by $3,500.Disregarding the limitation based on adjusted gross income,how much of the cost of the Jacuzzi may Adrian take into account in determining his medical expense deduction for 2014? A)$ 3,000. B)$ 3,500. C)$ 6,500. D)$10,000.

Which of the following types of taxes are deductible on Schedule A in 2014? A)Personal property taxes. B)Local real estate taxes. C)FICA taxes. D)Only a and b

Gloria resides in a state that imposes a tax on income.The following information relates to Gloria's state income tax situation for 2014: Taxes withheld in 2014 $4,300 Refund received in 2014 of 2013 tax 700 Assessment paid in 2014 of 2012 tax 950 Assuming she elects to deduct state and local income taxes,what amount should Gloria use to calculate itemized deductions for her 2014 federal income tax return? A)$ 0. B)$3,600. C)$5,250. D)$5,950.

For the year ended December 31,2014,Sheniqua,a single professional,reported the following: Net investment income from interest,$14,000 Other expenses unrelated to the generation of interest,$6,000 Investment interest expense on funds borrowed in 2013 to purchase stocks and bonds,$15,000 What is the maximum amount that Sheniqua can deduct in 2014 as investment interest expense? A)$ 6,000. B)$ 8,000. C)$14,000. D)$15,000.

What is the maximum amount of home equity indebtedness on which interest is fully deductible? A)$ 0. B)$ 50,000. C)$100,000. D)$200,000.

During 2014,Manuel and Gloria incurred acquisition debt on their new residence of $1,150,000.On their joint tax return,what is the amount of their qualified acquisition debt on which they can deduct interest? A)$ 900,000. B)$1,000,000. C)$1,050,000. D)$1,150,000.

Robert and Becky (husband and wife)are both lawyers and they contribute money to various organizations each year.They file a joint return and their adjusted gross income for 2014 is $100,000.They contributed to the following organizations in 2014: • $5,000 to Alta Sierra country club • $10,000 to prevent cruelty to animals • $2,000 to State Bar Association Political Action Committee • $12,000 to cancer research foundation • Donated clothing to Salvation Army.(Robert purchased the items for $1,000,but the fair market value of the same items at a thrift store is equal to $50.) How much can Robert and Becky deduct as charitable contributions for the year 2014? A)$29,050. B)$25,000. C)$24,000. D)$22,050.

Donald and May (husband and wife)contributed $15,000 in cash to their synagogue during 2014.They also donated $3,000 to a private foundation which is a nonprofit cemetery organization.They knew a 30% limit applies to contributions to such foundations.Their adjusted gross income for the year 2014 was $30,000.Donald and May's deductible contribution for the year 2014 and any carryover to next year is: A)$18,000 with $0 carryover to next year. B)$15,000 with $2,100 carryover to next year. C)$7,500 with $2,100 carryover to next year. D)$15,000 with $3,000 carryover to next year.

For 2014,Lydia had adjusted gross income of $40,000 and made the following charitable contributions: Cash contribution to her synagogue: $1,500 Tuition to a private school paid directly to her niece: $1,200 Contribution to the Red Cross: $350 Cash contribution to a man begging on a freeway off ramp: $150 What is the maximum amount that she can deduct as a charitable contribution for 2014? A)$3,200. B)$3,050. C)$1,850. D)$1,650.

During the year,Megan's personal summer home was almost completely destroyed by a fire started in a work room.She had adjusted gross income of $110,000 in 2014 and related data with respect to the summer home follows: Cost basis: $121,000 Value before casualty: $155,000 Value after casualty: $ 15,000 Megan was partially insured for the loss and in 2014 she received a $100,000 insurance settlement.What is Megan's allowable casualty loss deduction for 2014? A)$ 9,900. B)$20,900. C)$35,900. D)$55,000.

For 2014,the AGI threshold for the deductibility of personal casualty losses generally is: A)2%. B)5%. C)7.5%. D)10%.

Which of the following miscellaneous itemized deductions are not subject to the 2% adjusted gross income limitation? A)Investment publications expense. B)Gambling losses,which are deductible up to the amount of gambling winnings. C)Tax preparation fees. D)Job-hunting expenses.

Barbara and Michael (wife and husband)are itemizing their Schedule A expenses on their tax year 2014 return.Michael traveled to Japan for his employer,but was not reimbursed.His meal expenses totaled $500.How much can Michael deduct for meals before applying the 2% of AGI limitation? A)$500. B)$250. C)$150. D)$0.

Which of the following items would be an itemized deduction on Schedule A of Form 1040 subject to the 2% of AGI floor? A)Professional dues to membership organizations. B)Work uniforms that cannot be used for normal wear. C)Job-hunting costs. D)All of the above.

Which of the deductions listed below is subject to the phase-out of the total dollar amount of certain itemized deductions that may be claimed by high-income individuals? A)Charitable contributions. B)Investment interest expense. C)Medical costs. D)Personal casualty losses.

Tyrone,who is single and under age 65,had the following income in 2014 • $59,800 in wages • $200 in interest • $10,000 in gambling winnings • $5,000 in short-term capital gains. Tyrone filed a Schedule A,Itemized Deductions,for 2014.While preparing that schedule,Tyrone,who had no above-the-line deductions,listed the following below-the-line deduction items he had incurred during the year: • $2,500 in medical expenses • $8,000 of mortgage interest paid • $2,000 in real estate taxes • $1,600 in state taxes • $12,000 in gambling losses • $3,400 in unreimbursed employee business expenses. What is the total amount of Schedule A itemized deductions that Tyrone can report in 2014? A)$27,500. B)$25,000. C)$23,500. D)$20,100.

For 2014,sales taxes are deductible as an itemized deduction based only on the actual amount of sales taxes paid.

For 2014,taxpayers may take an above-the-line deduction for the amount of mortgage insurance premium paid in 2014.

What are four major categories of deductible taxes for individual returns?

For 2014,describe the treatment that taxpayers can elect to take for the amount of either (1)state and local income taxes or (2)state and local general sales taxes paid during the tax year.

Often,individuals who purchase a home with a down payment of less than 20% are required to pay a mortgage insurance premium or,as it is sometimes referred to,private mortgage insurance (PMI).What is the treatment for mortgage insurance contracts issued in 2014?