Cory incurred and paid the following expenses:
Tax return preparation fee
$ 600
Moving expenses
2,000
Investment expenses
500
Expenses associated with rental property
1,500
Interest expense associated with loan to finance tax-exempt bonds
400

Calculate the amount that Cory can deduct (before any percentage limitations).
A)$5,000.
B)$4,600.
C)$3,000.
D)$1,500.
E)None of the above.

Question

Cory incurred and paid the following expenses:
Tax return preparation fee
$ 600
Moving expenses
2,000
Investment expenses
500
Expenses associated with rental property
1,500
Interest expense associated with loan to finance tax-exempt bonds
400
​
Calculate the amount that Cory can deduct (before any percentage limitations).
A)$5,000.
B)$4,600.
C)$3,000.
D)$1,500.
E)None of the above.

Quizplus · Accepted Answer

Cory can deduct all of the expenses listed except for the investment expenses, which are subject to a 2% adjusted gross income (AGI) limitation. Therefore, the total deductible amount is $600 + $2,000 + $1,500 + $400 = $4,500. After applying the 2% AGI limitation on investment expenses, the final deductible amount is $4,500 - ($500 x 2%) = $4,600.

Cory Incurred and Paid the Following Expenses