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:  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

- Home mortgage interest: $4,000
- Real estate taxes: $1,500 (limited to $10,000 maximum with state and local taxes)
- State income tax: $1,000 (limited to $10,000 maximum with state and local taxes)
- Charitable contribution: $100
- Total: $6,600
Since the question asks for the amount before any percentage limitations, we do not need to consider the AGI floor limitation for miscellaneous itemized deductions. Therefore, Cory can deduct the full $6,600. However, this amount exceeds the standard deduction for Cory's filing status, so it is not clear whether itemizing deductions would be beneficial. Nonetheless, the question only asks for the amount that Cory can deduct, and the answer is B.

Cory Incurred and Paid the Following Expenses: Calculate the Amount