Question

1) Pat gave 5,000 shares of stock in Coyote Corporation (a publicly traded corporation) to her church (a qualified charitable organization) in the current year. The stock was worth $180,000 and she had acquired it as an investment four years ago at a cost of $120,000. She reported AGI of $300,000 for the year. In completing her current income tax return, how much is her current-year charitable contribution deduction?

2)

Brad, who would otherwise qualify as Faye’s dependent, had gross income of $9,000 during the

year. Faye, who had AGI of $120,000, paid the following medical expenses this year:

Cataract operation for Brad	$5,400
Brad’s prescribed contact lenses	1,800
Faye’s doctor and dentist bills	12,600
Prescribed drugs for Faye	2,550
Total	$22,350

What is the total medical expense deduction for Faye?

3)

Corey is the city sales manager for “RIBS,” a national fast food franchise. Every working day,

Corey drives his car as follows:

	Miles
home to office	20
Office to RIBS No. 1	15
Ribs No. 1 to No.2	18
Ribs No2. to No 3.	13
Ribs no 3 to home	30

Corey renders an adequate accounting to his employer. What are Corey’s reimbursable miles?

Answer 1

Question No. (1)

Answer -

Information Given -

Pat gave 5000 shares of stock in Coyote Corporation (a publicly traded corporation) to her church (a qualified charitable organization) in the current year. The stock was worth $180000 and she had acquired it as an investment four years ago at a cost of $120000. She reported AGI of $300000 for the year.

Pat's current-year Charitable contribution deduction -

= Fair market value of stock

= $180000.

.

Question No. (2)

Answer -

Calculation of Total Medical Expense Deduction for Faye

	Particulars	Explanation	Amount ($)
A.	Faye's AGI	Given in question	120000
B.	Total medical expenses	Given in question	22350
Total Medical Expense Deduction for Faye		Qualified, unreimbursed medical expenses that are more than 10 % of Adjusted gross income are allowed for tax deduction. = (B) - (10% * A) = $22350 - (10% * $120000) = $10350	$10350

.

Question No. (3)

Answer -

Calculation of Corey’s Reimbursable Miles

	Particulars	Calculation	Miles
A.	Office to RIBS No. 1	Given in question	15
B.	RIBS No. 1 to No. 2	Given in question	18
C.	RIBS No. 2 to No. 3	Given in question	13
Corey’s Reimbursable Miles [A+B+C]		15 Miles + 18 Miles + 13 Miles	46