📝 Other Itemized Deductions OBBBA MCQ — Taxation Course | CPA Exam REG | EA Course

Why It Matters

Understanding the 2026 itemized deduction reforms is critical for accurate tax filing and for CPA/EA candidates to pass their exams, directly affecting financial planning and professional certification outcomes.

Key Takeaways

• Miscellaneous itemized deductions subject to 2% floor eliminated.
• Unreimbursed educator expenses above the line are now deductible.
• Gambling losses limited to 90% of winnings, not fully deductible.
• Unreimbursed employee business expenses removed from Schedule A.
• Study resources recommended: farhatlectures.com for CPA/EA exam prep.

Summary

The video dissects a multiple‑choice question about the upcoming changes to itemized deductions under the so‑called “one big beautiful bill,” which takes effect in 2026. It clarifies which statements about the new tax regime are correct, guiding CPA and EA candidates through the nuances of the reform.

Key points include the outright removal of miscellaneous itemized deductions that were previously subject to the 2% of AGI floor, and the introduction of unreimbursed educator expenses above the statutory above‑the‑line cap as a deductible item not subject to any floor. Gambling losses are now capped at 90% of winnings, meaning taxpayers cannot fully offset gambling income, while all unreimbursed employee business expenses have been eliminated from Schedule A.

The instructor emphasizes that answer choice C is correct, noting, “Your losses are limited to 90% of your gambling losses… and unreimbursed education expense can be claimed not subject to any floor.” This explanation underscores the shift from older rules where gambling losses were fully deductible and miscellaneous deductions existed.

For taxpayers, the changes demand revised planning strategies and careful record‑keeping to maximize allowable deductions. For exam takers, mastering these updates is essential to succeed on the CPA and EA exams, making targeted study resources like farhatlectures.com highly valuable.

Original Description

This MCQ video covers other itemized deductions under the One Big Beautiful Bill Act OBBBA, including the deduction for qualified tips under OBBBA, eligibility, limitations, and proper tax reporting. It is designed for learners studying the Taxation Course, candidates preparing for the Uniform CPA Examination — Regulation (REG) Section, and those taking the Enrolled Agent Course. This MCQ lecture helps learners practice applying OBBBA deduction rules in exams and real-world tax scenarios.

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