Malcolm Moore, single, had medical expenses of $5,000 last year and took a $3,000 deduction. He was reimbursed $4,500 this year by his insurance company. His total itemized deductions last year were $12,000. What amount must he include in this year's tax return as gross income?
A) $5,000
B) $4,500
C) $3,000
D) $2,700
E) None of the above

Question

Quizplus · Accepted Answer

the amount that must be included in income is the lesser of the reimbursement or the excess itemized deductions for the previous year.

Malcolm Moore, Single, Had Medical Expenses of $5,000 Last Year