ACCT Misc. Six Problems Solution



1. Mickey is a 12-year-old dialysis patient. Three times a week for the entire year he and his mother, Sue, drive 20 miles one way to Mickeys dialysis clinic. On the way home they go 10 miles out of their way to stop at Mickey’s favourite restaurant. Their total round trip is 50 miles per day. How many of those if any, can Sue use to calculate an itemized deduction for transportation? Use the mileage rate in effect for 2013(mileage rate for 2013 is 24.0 cents per mile). Explain your answer.

2. Reggie had AGI of $32,000 in 2013. During the year, he paid for the following medical expenses:

Drugs (prescribed by physicians) $200

Marijuana (prescribed by physicians) 1,400

Health insurance premiums-after taxes850

Doctors’ fees 1,250

Eyeglasses 375

Over-the-counter drugs 200

Reggie received $500 in 2013 for a portion of the doctors’ fees from his insurance. What is Reggie’s medical expense deduction?

3. Leslie and Jason paid the following expenses during 2013:

Interest on a car loan $100

Interest on lending institution loan

(Used to purchase municipal bonds) 3,000

Interest on home mortgage

(Home mortgage principal is less than $1,000,000) 2,100

What is the maximum amount they can use in the calculating itemized deductions for 2013?

4. Tyrone and Akira incurred and paid the following amounts of interest during 2013:

Home acquisition debt interest $15,000

Credit card interest 5,000

Home equity loan interest 6,500

Investment interest expense 10,000

With 2013 investment interest income of $2,000, calculate the amount of their allowable deduction for investment interest and their total deduction for allowable interest. Home acquisition principal is less than $1,000,000, and the home equity loan is less than $100,000.

5. Tom made a charitable contribution to his church in the current year. He donated common stock valued at $33,000 (acquired as an investment in 1997 for $14,000). Tom’s AGI in the current year is $75,000. What is his allowable charitable contribution deduction? How are any excess amounts treated?

6. Reynaldo and Sonya, a married couple, had flood damage in their home due to a faulty water heater during 2013,which ruined the furniture that was stored in their garage. The following items were completely destroyed and not salvageable:

Damaged items

Fair Market value Just prior to Damage

Original Items Cost

Antique poster bed



Pool table



Large screen TV



Their homeowner’s insurance policy had a $10,000 deductible for the personal property, which was deducted from their insurance reimbursement of $12,700, resulting in a net payment of $2,700. Their AGI for 2013 was $40,000. What is the amount of casualty loss that Reynaldo and Sonya on their join return for 2013?


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