Question

In each of the following independent cases,indicate the amount (1) deductible for AGI,(2) deductible from AGI,and (3)
neither deductible for nor deductible from AGI before considering income limitations or the standard deduction..(Leave no
answer blank.Enter zero if applicable.)

a.Fran spent $142 for uniforms for use on her job.Her employer reimbursed her for $115 of this amount under an accountabe plan
(and did not report the reimbursement as wages).

b.Timothy,a plumber employed by ACE Plumbing,spent $123 for sma Itoo S to be used on hisjob,but he was not reimbursed by ACE.

c.Jake is a perfume salesperson.Because of his high pay,he receives no alowance or reimbursement from his employer for
advertising expenses even though his position requires him to advertise frequently.During the year,he spent $4,450 on legitimate
business advertisements.

d.Trey is a self-employed special-duty nurse.He spent $205 for uniforms.

e.Mary,a professor at a community col lege,spent $440 for magazine subscript ons.The magazines were helpful for her research
activities,but she was not reimbursed for the expenditures.

f.Wayne lost $640 on the bets he made atthe racetrack,but he won $128 playing S lot machines.

Answer 1

A.

Deductible for AGI =0

Deductible from AGI = $27 (142-115=27)

Not Deductible = 0

$0 for AGI. $27 from AGI (miscellaneous itemized deduction as unreimbursed employee businessexpense). Income and expenses associated with the $115 reimbursement completely offset each other and are ignored. Note that the accountable plan only reimburses deductible expenses.

2.

B.

Deductible for AGI=0

Deductible from AGI =123

Not Deductible= 0

(from ­ miscellaneous itemized deduction as employee business expense).

C.

Deductible for AGI = 0

Deductible from AGI = 4450

Not Deductible = 0

(from ­ miscellaneous itemized deduction as employee business expense)

D.

Deductible for AGI = 205

Deductible from AGI = 0

Non deductible = 0

(For trade expense assuming that the special duty uniforms cannot be adapted to normal use).

E.

Deductible for AGI =

Deductible from AGI = 440

Non deductible = 0

($440 from AGI as miscellaneous itemized deduction as employee business expenses).

F.

Deductible for AGI =

Deductible from AGI = 128

Non deductible = 513

($128 from AGI as a miscellaneous itemized deduction not subject to 2% floor. Wayne's gambling lossdeduction is limited to his winnings. The remaining $513 is not deductible)