Cory incurred and paid the following expenses:

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:
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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 the total expenses of $4,600 before any percentage limitations, which includes the following:

- Medical expenses: $3,000
- State and local income taxes: $1,300
- Charitable contributions: $300

Note that the limit for medical expenses deduction is 7.5% of adjusted gross income, so if Cory's AGI is less than $40,000, he can deduct the full amount of $3,000. If his AGI is more than $40,000, he can only deduct the amount that exceeds 7.5% of his AGI.

Cory Incurred and Paid the Following Expenses