• Amortizable premium on taxable bonds.

• Casualty and theft losses from income-producing property.

• Federal estate tax on income in respect of a decedent.

• Gambling losses up to the amount of gambling winnings.

• Impairment-related work expenses of persons with disabilities.

• Loss from other activities from Schedule K-1 (Form 1065-B), box 2.

• Losses from Ponzi-type investment schemes.

• Repayments of more than $3,000 under a claim of right.

• Unrecovered investment in an annuity.

In general, if the amount you pay for a bond is greater than its stated principal amount, the excess is bond premium. You can elect to amortize the premium on taxable bonds. The amortization of the premium is generally an offset to interest income on the bond rather than a separate deduction item.

Deduction for excess premium. On certain bonds (such as bonds that pay a variable rate of interest or that provide for an interest-free period), the amount of bond premium allocable to a period may exceed the amount of stated interest allocable to the period. If this occurs, treat the excess as a miscellaneous itemized deduction that is not subject to the 2% limit. However, the amount deductible is limited to the amount by which your total interest inclusions on the bond in prior periods exceed the total amount you treated as a bond premium deduction on the bond in prior periods. If any of the excess bond premium cannot be deducted because of the limit, this amount is carried forward to the next period and is treated as bond premium allocable to that period.

Pre-1998 choice to amortize bond premium. If you made the choice to amortize the premium on taxable bonds before 1998, you can deduct the bond premium amortization that is more than your interest income only for bonds acquired during 1998 and later years.

You can deduct a casualty or theft loss as a miscellaneous itemized deduction not subject to the 2% limit if the damaged or stolen property was income-producing property (property held for investment, such as stocks, notes, bonds, gold, silver, vacant lots, and works of art). First report the loss in Section B of Form 4684. You may also have to include the loss on Form 4797 if you are otherwise required to file that form. To figure your deduction, add all casualty or theft losses from this type of property included on Form 4684, lines 36 and 42b, or Form 4797, line 18a. For more information on casualty and theft losses, see Publication 547.

You can deduct the federal estate tax attributable to income in respect of a decedent that you as a beneficiary include in your gross income. Income in respect of the decedent is gross income that the decedent would have received had death not occurred and that was not properly includible in the decedent's final income tax return. See Publication 559 for information about figuring the amount of this deduction.

You must report the full amount of your gambling winnings for the year on Form 1040, line 21. You deduct your gambling losses for the year on Schedule A (Form 1040), line 28. You cannot deduct gambling losses that are more than your winnings. Generally, nonresident aliens cannot deduct gambling losses on Schedule A (Form 1040NR).

You cannot reduce your gambling winnings by your gambling losses and report the difference. You must report the full amount of your winnings as income and claim your losses (up to the amount of winnings) as an itemized deduction. Therefore, your records should show your winnings separately from your losses.

Diary of winnings and losses. You must keep an accurate diary or similar record of your losses and winnings.

Your diary should contain at least the following information.

Proof of winnings and losses. In addition to your diary, you should also have other documentation. You can generally prove your winnings and losses through Form W-2G, Certain Gambling Winnings, Form 5754, Statement by Person(s) Receiving Gambling Winnings, wagering tickets, canceled checks, substitute checks, credit records, bank withdrawals, and statements of actual winnings or payment slips provided to you by the gambling establishment.

For specific wagering transactions, you can use the following items to support your winnings and losses.

These recordkeeping suggestions are intended as general guidelines to help you establish your winnings and losses. They are not all-inclusive. Your tax liability depends on your particular facts and circumstances.

If you have a physical or mental disability that limits your being employed, or substantially limits one or more of your major life activities, such as performing manual tasks, walking, speaking, breathing, learning, and working, you can deduct your impairment-related work expenses.

Impairment-related work expenses are ordinary and necessary business expenses for attendant care services at your place of work and other expenses in connection with your place of work that are necessary for you to be able to work.

See Impairment-related work expenses, later under How To Report.

If the amount reported in Schedule K-1 (Form 1065-B), box 2, is a loss, report it on Schedule A (Form 1040), line 28, or Schedule A (Form 1040NR), line 16 (only if effectively connected with a U.S. trade or business). It is not subject to the passive activity limitations.

If you are a fee-basis official, you can claim your expenses in performing services in that job as an adjustment to income rather than as a miscellaneous itemized deduction. See Publication 463 for more information.

If you are a qualified performing artist, you can deduct your employee business expenses as an adjustment to income rather than as a miscellaneous itemized deduction. If you are an employee, complete Form 2106 or Form 2106-EZ. See Publication 463 for more information.

If you had to repay more than $3,000 that you included in your income in an earlier year because at the time you thought you had an unrestricted right to it, you may be able to deduct the amount you repaid, or take a credit against your tax. See Repayments in Publication 525 for more information.

A retiree who contributed to the cost of an annuity can exclude from income a part of each payment received as a tax-free return of the retiree's investment. If the retiree dies before the entire investment is recovered tax free, any unrecovered investment can be deducted on the retiree's final income tax return. See Publication 575, Pension and Annuity Income, for more information about the tax treatment of pensions and annuities.

• Adoption expenses.

• Broker's commissions that you paid in connection with your IRA or other investment property.

• Burial or funeral expenses, including the cost of a cemetery lot.

• Campaign expenses.

• Capital expenses.

• Check-writing fees.

• Club dues.

• Commuting expenses.

• Fees and licenses, such as car licenses, marriage licenses, and dog tags.

• Fines and penalties, such as parking tickets.

• Health spa expenses.

• Hobby losses—but see Hobby expenses, earlier.

• Home repairs, insurance, and rent.

• Home security system.

• Illegal bribes and kickbacks—see Bribes and kickbacks in chapter 11 of Publication 535.

• Investment-related seminars.

• Life insurance premiums.

• Lobbying expenses.

• Losses from the sale of your home, furniture, personal car, etc.

• Lost or misplaced cash or property.

• Lunches with co-workers.

• Meals while working late.

• Medical expenses as business expenses.

• Personal disability insurance premiums.

• Personal legal expenses.

• Personal, living, or family expenses.

• Political contributions.

• Professional accreditation fees.

• Professional reputation, expenses to improve.

• Relief fund contributions.

• Residential telephone line.

• Stockholders' meeting, expenses of attending.

• Tax-exempt income, expenses of earning or collecting.

• The value of wages never received or lost vacation time.

• Travel expenses for another individual.

• Voluntary unemployment benefit fund contributions.

• Wristwatches.

You cannot deduct the expenses of adopting a child but you may be able to take a credit for those expenses. For details, see Form 8839, Qualified Adoption Expenses.

You cannot deduct campaign expenses of a candidate for any office, even if the candidate is running for reelection to the office. These include qualification and registration fees for primary elections.

You cannot currently deduct amounts paid to buy property that has a useful life substantially beyond the tax year or amounts paid to increase the value or prolong the life of property. If you use such property in your work, you may be able to take a depreciation deduction. See Publication 946. If the property is a car used in your work, also see Publication 463.

If you have a personal checking account, you cannot deduct fees charged by the bank for the privilege of writing checks, even if the account pays interest.

Generally, you cannot deduct the cost of membership in any club organized for business, pleasure, recreation, or other social purpose. This includes business, social, athletic, luncheon, sporting, airline, hotel, golf, and country clubs.

You cannot deduct dues paid to an organization if one of its main purposes is to:

Dues paid to airline, hotel, and luncheon clubs are not deductible.

You cannot deduct commuting expenses (the cost of transportation between your home and your main or regular place of work). If you haul tools, instruments, or other items in your car to and from work, you can deduct only the additional cost of hauling the items, such as the rent on a trailer to carry the items.

You cannot deduct fines or penalties you pay to a governmental unit for violating a law. This includes an amount paid in settlement of your actual or potential liability for a fine or penalty (civil or criminal). Fines or penalties include parking tickets, tax penalties, and penalties deducted from teachers' paychecks after an illegal strike.

You cannot deduct health spa expenses, even if there is a job requirement to stay in excellent physical condition, such as might be required of a law enforcement officer.

You cannot deduct the cost of a home security system as a miscellaneous deduction. However, you may be able to claim a deduction for a home security system as a business expense if you have a home office. See Home Office under Unreimbursed Employee Expenses, earlier, and Publication 587.

You cannot deduct any expenses for attending a convention, seminar, or similar meeting for investment purposes.

You cannot deduct premiums you pay on your life insurance. You may be able to deduct, as alimony, premiums you pay on life insurance policies assigned to your former spouse. See Publication 504, Divorced or Separated Individuals, for information on alimony.

You generally cannot deduct amounts paid or incurred for lobbying expenses. These include expenses to:

Lobbying expenses also include any amounts paid or incurred for research, preparation, planning, or coordination of any of these activities.

You cannot deduct a loss based on the mere disappearance of money or property. However, an accidental loss or disappearance of property can qualify as a casualty if it results from an identifiable event that is sudden, unexpected, or unusual. See Publication 547.

You cannot deduct the expenses of lunches with co-workers, except while traveling away from home on business. See Publication 463 for information on deductible expenses while traveling away from home.

You cannot deduct the cost of meals while working late. However, you may be able to claim a deduction if the cost of the meals is a deductible entertainment expense, or if you are traveling away from home. See Publication 463 for information on deductible entertainment expenses and expenses while traveling away from home.

You cannot deduct personal legal expenses such as those for the following.

You cannot deduct these expenses even if a result of the legal proceeding is the loss of income-producing property.

You cannot deduct contributions made to a political candidate, a campaign committee, or a newsletter fund. Advertisements in convention bulletins and admissions to dinners or programs that benefit a political party or political candidate are not deductible.

You cannot deduct professional accreditation fees such as the following.

You cannot deduct expenses of radio and TV appearances to increase your personal prestige or establish your professional reputation.

You cannot deduct contributions paid to a private plan that pays benefits to any covered employee who cannot work because of any injury or illness not related to the job.

You cannot deduct any charge (including taxes) for basic local telephone service for the first telephone line to your residence, even if it is used in a trade or business.

You cannot deduct transportation and other expenses you pay to attend stockholders' meetings of companies in which you own stock but have no other interest. You cannot deduct these expenses even if you are attending the meeting to get information that would be useful in making further investments.

You cannot deduct expenses to produce tax-exempt income. You cannot deduct interest on a debt incurred or continued to buy or carry tax-exempt securities.

If you have expenses to produce both taxable and tax-exempt income, but you cannot identify the expenses that produce each type of income, you must divide the expenses based on the amount of each type of income to determine the amount that you can deduct.

You generally cannot deduct travel expenses you pay or incur for a spouse, dependent, or other individual who accompanies you (or your employee) on personal or business travel. See Publication 463 for more information on deductible travel expenses.

You cannot deduct voluntary unemployment benefit fund contributions you make to a union fund or a private fund. However, you can deduct contributions as taxes if state law requires you to make them to a state unemployment fund that covers you for the loss of wages from unemployment caused by business conditions.

You cannot deduct the cost of a wristwatch, even if there is a job requirement that you know the correct time to properly perform your duties.

1. You are a qualified performing artist claiming performing-artist-related expenses.

2. You are a fee-basis state or local government official claiming expenses in performing that job.

3. You are an individual with a disability and are claiming impairment-related work expenses. See Impairment-related work expenses, later.

4. You have travel expenses as a member of the Armed Forces reserves that you can deduct as an adjustment to gross income.

5. You are claiming job-related vehicle, travel, transportation, meal, or entertainment expenses. This does not apply if either of the following is true.

   1. None of your expenses are deductible because of the 2% limit on miscellaneous itemized deductions.

   2. Your only entry on Form 2106 or Form 2106-EZ is on line 4. If this is true and (a) above is not true, enter the expenses directly on Schedule A (Form 1040), line 21, or Schedule A (Form 1040NR),
      line 9.

1. You are not reimbursed by your employer for any expenses. (Amounts your employer included as wages on your Form W-2, box 1, are not considered reimbursements.)

2. Either:

   1. You are not claiming vehicle expense, or

   2. You are using the standard mileage rate for your vehicle.

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