A review of the 2015 tax file of Gregory, a single taxpayer who is age 40, provides the following information regarding Gregory's 2015 tax status: In 2016, Gregory receives a reimbursement for last year's medical expenses of $1,200. As a result, Gregory must
A) include $200 in gross income for 2016.
B) include $1,200 in gross income for 2016.
C) reduce 2016's medical expenses by $1,200.
D) amend the 2015 return.

Question

A review of the 2015 tax file of Gregory, a single taxpayer who is age 40, provides the following information regarding Gregory's 2015 tax status:  In 2016, Gregory receives a reimbursement for last year's medical expenses of $1,200. As a result, Gregory must
A) include $200 in gross income for 2016. 
B) include $1,200 in gross income for 2016. 
C) reduce 2016's medical expenses by $1,200. 
D) amend the 2015 return.

Quizplus · Accepted Answer

Include in 2016's income the lesser of the reimbursement or to the extent the tax benefit received in 2015. 11eac5e3_b0ae_1ca2_a396_a7a61ab95bd2_TB5639_00

A Review of the 2015 Tax File of Gregory, a Single