[Anonymous]

Hi all,

I am looking at the Ninja Notes, page 15. It says that the AGI threshold for medical expenses is 10%. I pulled up a 2017 Schedule A, and it shows it as 7.5%. I did a bit of digging here and elsewhere online. It appears that REG is testing at the 10% amount, but I don’t understand why when actual form used shows 7.5%. See line 3:

https://www.irs.gov/pub/irs-pdf/f1040sa.pdf

What am I missing?

[RE2PECT]

The new tax law changed the threshold from 10% AGI to 7.5% AGI for 2017 & 2018. I'm assuming since the exam isn't testing changes to the new laws yet, it's staying with the old amounts.

FAR: 75 Roger & Ninja (notes/flashcards/audio/MCQ)
AUD: 73, 81
BEC: 71, retake 8/29
REG:

[Recked]

If a medical calculation is required, they will more likely than not provide you with the % to be used in the question.

[Anonymous]

Thanks to you both. I’m a bit frustrated though, because it isn’t clear to me which year is being tested. In fact, it seems that at least 2016 and 2017 are being tested. I say that because the study materials indicate that for section 179, the amounts are from 2017.

I used to prepare individual tax returns so I know what the major forms look like and how the money flows through them. While I am studying, I like to look up the instructions for the form, and to print the form and include it with my study materials. I take notes directly on the form.

But there doesn’t appear to be a principled basis for which topics are for which years. So it isn’t clear to me which forms I should be using. Or am I wrong about that? Is there a principled basis that tells us which year to use while studying each topic? Why would we be tested on different years?

[ps8904]

Are there any details in the question about the taxpayer's age? Medical expenses for taxpayers above age 65 are reduced by 7.5% of AGI rather than 10% in 2016.

[Anonymous]

There were no details about that. This was from the study materials, not mcq.

I just came across another discrepancy in tax years. Book 4, Property Transactions, p. 35, shows the applicable credit as $2,117,800. I'm looking at the Gift Tax return and the instructions (form 706), and that amount is from 2015. The amount for 2017 is $2,114,800.
https://www.irs.gov/pub/irs-pdf/f706.pdf
https://www.irs.gov/pub/irs-pdf/i706.pdf

[Author]

Replies