Which of the following is considered a miscellaneous itemized deduction not subject to the 2%-of-AGI limitation?

Gambling losses are categorized as a miscellaneous itemized deduction that is not subject to the 2%-of-Adjusted Gross Income (AGI) limitation. This means that for tax purposes, taxpayers can deduct gambling losses up to the amount of their gambling winnings. This is a unique aspect of gambling-related deductions, as many other miscellaneous itemized deductions are limited to the amount by which they exceed 2% of AGI, making gambling losses distinct in how they are treated in the tax code.

Other categories, such as medical expenses, mortgage interest, and charitable contributions, do not fall under miscellaneous deductions and are subject to different rules. Medical expenses, for example, are deductible only to the extent that they exceed a certain percentage of AGI, which varies with tax law changes. Mortgage interest is generally a direct deduction and does not fall into the miscellaneous deduction category. Charitable contributions also have specific limitations and rules governing their deductibility, distinct from the treatment of gambling losses.

Understanding these distinctions is essential for accurately preparing tax returns and advising clients on deductible expenses.