Internal Revenue Service United States Department of the Treasury
Level Basic Advanced Military International

Itemized Deductions

Summary and Exercises


This lesson discussed when and how to calculate and report the allowable portion of a taxpayer's itemized deductions.

Puerto Rican taxpayers who have exempt Puerto Rico source income and itemize their deductions:

  • Must report the allowable portion of their itemized deductions
  • Cannot take deductions that apply to exempt Puerto Rico income

If a deduction does not apply to a specific type of income, you must calculate and report its allowable portion:

  • To calculate the allowable portion, use this formula:

(Gross income subject to U.S. tax/Gross income from all sources) x Deduction = Allowable portion of deduction

  • To report the allowable portion of each deduction, complete Schedule A