Federal Tax Research 10th Edition by Steven Gill, Gerald Whittenburg, Roby Sawyers, Debra Sanders, William Raabe

Exercise 21

Jim Jones owns 50 percent of the stock of an S corporation. In 2014, Jim obtains a health insurance plan providing coverage for himself, his wife, and their two children. Jim makes all premium payments to the plan during 2014 and furnishes proof of the payments to the S corporation, which then reimburses him for the payments and reports the premium payments as wages on Jim's W-2 for the year. Copyright 2015 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. Due to electronic rights, some third party content may be suppressed from the eBook and/or eChapter(s). Editorial review has deemed that any suppressed content does not materially affect the overall learning experience. Cengage Learning reserves the right to remove additional content at any time if subsequent rights restrictions require it. Jim reports the amounts as gross income on his 2014 personal tax return. Jim's income from the S corporation exceeds the amount of premiums for the health coverage and he does not participate in any subsidized health plans maintained by another employer or an employer of his spouse. Is Jim allowed to take a deduction on his personal tax return for the health insurance premiums paid during the year