Question 1

In 2014,Dena traveled 600 miles for specialized medical treatment that was not available in her hometown.She paid $90 for meals during the trip,$145 for a hotel room on Tuesday night,and $15 in parking fees.She did not keep records of other out-of-pocket costs for transportation.Dena can include $206 in computing her medical expenses.

Accepted Answer

Dena can deduct $141 (600 miles × 23.5 cents per mile)for transportation.The 23.5 cents per mile automatic mileage option for medical transportation does not include related parking fees and tolls,so she also can deduct the $15 paid for parking fees.She can deduct $50 for the hotel,but she cannot deduct the cost of meals.Therefore,Dena can deduct $206 ($141 + $50 + $15 = $206).

Question 2

Adrienne sustained serious facial injuries in a motorcycle accident.To restore her physical appearance,Adrienne had cosmetic surgery.She cannot deduct the cost of this procedure as a medical expense.

Accepted Answer

Unnecessary cosmetic surgery is not deductible.However,Adrienne's surgery restored her appearance and corrected a problem caused by the accident.

Question 3

Mindy paid an appraiser to determine how much a capital improvement made for medical reasons increased the value of her personal residence.The appraisal fee qualifies as a deductible medical expense.

Accepted Answer

The appraisal fee does not qualify as a medical expense,but it qualifies as a deduction under § 212 (related to the determination of tax liability)as a miscellaneous itemized deduction.

Question 4

The election to itemize is appropriate when total itemized deductions are less than the standard deduction based on the taxpayer's filing status.

Accepted Answer

The election to itemize is appropriate when total itemized deductions exceed the standard deduction based on the taxpayer's filing status.

Question 5

A taxpayer may not deduct the cost of new curbing (relative to a personal residence),even if the construction is required by the city and the curbing provides an incidental benefit to the public welfare.

Accepted Answer

Such assessments are added to the adjusted basis of the taxpayer's property.

Question 6

Matt,a calendar year taxpayer,pays $11,000 in medical expenses in 2014.He expects $5,000 of these expenses to be reimbursed by an insurance company in 2015.In determining his medical expense deduction for 2014,Matt must reduce his 2014 medical expenses by the amount of the reimbursement he expects in 2015.

Accepted Answer

Unlike the casualty loss deduction,the medical expense deduction does not have to be reduced by anticipated recoveries.Matt can include all $11,000 as a medical expense in 2014.

Question 7

Chad pays the medical expenses of his son,James.James would qualify as Chad's dependent except that he earns $7,500 during the year.Chad may claim James' medical expenses even if he is not a dependent.

Accepted Answer

Chad may deduct the medical expenses.The gross income test is waived in determining dependency status for medical expense purposes.

Question 8

Jim's employer pays half of the premiums on a group medical insurance plan covering all employees,and employees pay the other half.Jim can exclude the half of the premium paid by his employer from his gross income and may include the half he pays in determining his medical expense deduction.

Accepted Answer

Medical coverage provided by an employer is a nontaxable fringe benefit.Premiums paid by the taxpayer may be included in determining deductible medical expenses.

Question 9

Personal expenditures that are deductible as itemized deductions include medical expenses,Federal income taxes,state income taxes,property taxes on a personal residence,mortgage interest,and charitable contributions.

Accepted Answer

All of the listed personal expenditures except Federal income taxes are deductible as itemized deductions.

Question 10

Shirley pays FICA (employer's share)on the wages she pays her maid to clean and maintain Shirley's personal residence.The FICA payment is not deductible as an itemized deduction.

Accepted Answer

The payment is a nondeductible personal expense.

Question 11

In 2015,Rhonda received an insurance reimbursement for medical expenses incurred in 2014.She is not required to include the reimbursement in gross income in 2015 if she claimed the standard deduction in 2014.

Accepted Answer

The reimbursement is included in gross income only to the extent the taxpayer derived a tax benefit from deducting the expense in the previous year.Because Rhonda did not itemize in 2014,she received no tax benefit.

Question 12

Sergio was required by the city to pay $2,000 for the cost of new curbing installed by the city in front of his personal residence.The new curbing was installed throughout Sergio's neighborhood as part of a street upgrade project.Sergio may not deduct $2,000 as a tax,but he may add the $2,000 to the basis of his property.

Accepted Answer

Such assessments are added to the adjusted basis of the taxpayer's property.

Question 13

Bill paid $2,500 of medical expenses for his daughter,Marie.Marie is married to John and they file a joint return.Bill can include the $2,500 of expenses when calculating his medical expense deduction.

Accepted Answer

The joint return test is waived in determining dependency status for medical expense deduction purposes.Bill may include the $2,500 in calculating his medical expenses.

Question 14

Maria traveled to Rochester,Minnesota,with her son,who had surgery at the Mayo Clinic.Her son stayed at the clinic for the duration of his treatment.She paid airfare of $300 and $50 per night for lodging.The cost of Maria's airfare and lodging cannot be included in determining her medical expense deduction.

Accepted Answer

A deduction is allowed for transportation and lodging expenses.In addition,Maria's deduction for lodging is allowed,since it falls within the limit of $50 per night.

Question 15

In 2014,Brandon,age 72,paid $3,000 for long-term care insurance premiums.He may include the $3,000 in computing his medical expense deduction for the year.

Accepted Answer

Taxpayers over age 70 may include up to $4,660 of long-term care insurance premiums in computing medical expenses.

Question 16

Fees for automobile inspections,automobile titles and registration,bridge and highway tolls,parking meter deposits,and postage are not deductible if incurred for personal reasons,but they are deductible as deductions for AGI if incurred as a business expense by a self-employed taxpayer.

Accepted Answer

As noted in the text,certain taxes are deductible and certain are nondeductible.Specified taxes (such as state income taxes and real and personal property taxes)are deductible as itemized deductions,but personal fees are not.However,fees incurred in a trade or business are deductible,but not as itemized deductions.

Question 17

Upon the recommendation of a physician,Ed has a swimming pool installed at his residence because of a heart condition.If he is allowed to deduct all or part of the cost of the pool,Ed's increase in utility bills due to the operation of the pool qualifies as a medical expense.

Accepted Answer

Such expense does qualify as a medical expense.

Question 18

A physician recommends a private school for Ellen's dependent child.Because of the physician's recommendation,the cost of the private school will qualify as a medical expense deduction (subject to percentage limitations).

Accepted Answer

A recommendation of a physician,although helpful,does not make the expenditure automatically deductible as a medical expense.

Question 19

Mason,age 70,a physically handicapped individual,pays $10,000 in 2014 for the installation of wheelchair ramps,support bars,and railings in his personal residence.These improvements increase the value of his personal residence by $2,000.Only $8,000 of the expenditure qualifies as a medical deduction (subject to the AGI floor).

Accepted Answer

The full $10,000 is included as a medical expense under a special rule applicable to physically handicapped persons.The deduction is subject to the 7.5% floor in 2014.The 7.5% floor applies (rather than the 10% floor)because Mason is over 65 years of age.

Question 20

Georgia contributed $2,000 to a qualifying Health Savings Account in 2014.The entire amount qualifies as an expense deductible for AGI.

Accepted Answer

The payment to the HSA is a deduction for AGI,not an itemized medical expense deduction.

Quiz 10: Deductions and Losses: Certain Itemized Deductions