Wrap-Up Questions for Chapter 7
- Describe how § 170(e)(1)(A), which permits a deduction of the fmv of gifts of property to charity rather than the adjusted basis of the property creates a “true” loophole.
- Why should state and local property taxes and/or state and local income or sales taxes be deductible? What policies do such deductions pursue?
- Congress recently increased the floor for medical deductions from 7.5% of agi to 10% of agi. The floor used to be 3%. The general trend of this floor has been upward. How are
these movements in the floor likely to affect who may take the medical expense deduction and how big a deduction they may take?
- When a taxpayer is entitled to deduct moving expenses, why should a taxpayer be permitted to deduct the expense associated with a move of kenneling a dog but not the cost of a
meal while en route to taxpayer’s new home?
- Should Congress implement its tax policy with greater use of credits against tax liability rather than deductions or exclusions from gross income? Why? What about phasedowns or