Scott Is a Self Employed Plumber and His Wife, Emily

Scott is a self employed plumber and his wife, Emily, is a full-time employee for the University. Emily has health insurance from a qualified plan provided by the University, but Scott has chosen to purchase his own health insurance rather than participate in Emily's plan. Besides paying $5,400 for his health insurance premiums, Scott also pays the following expenses associated with his plumbing business: $$\begin{array} { | l | r | } \hline \text { Gross rental income } & \$ 20,000 \\\hline \text { Tier } 1 \text { expenses: } & \\\quad \text { Mortgage interest } = ( 90140 ) \times \$ 8,500 = \$ 5,464 & \\\quad \text { Property taxes } = ( 901140 ) \times \$ 4,000 = \$ 2,571 & \\\text { Less: total Tier } 1 \text { expenses } & ( 8,035 ) \\\hline \text { Balance } & \$ 11,965 \\\hline \text { Tier 2 expenses: } & \\\quad \text { Insurance } = ( 901140 ) \times \$ 1,500 = \$ 964 & \\\quad \text { Repairs and Maintenance } = ( 901140 ) \times \$ 950 = \$ 611 & \\\quad \text { Utilities } = ( 90 / 140 ) \times \$ 1,900 = \$ 1,221 & \\\text { Less: total Tier } 2 \text { expenses } & \$ 9,169 \\\hline \text { Balance } & \\\hline \text { Tier } 3 \text { expenses: } \\\text { Depreciation (90/140) } \times \$ 5,500 = \$ 3,536 & ( 3,536 ) \\\hline \text { Net income from rental } & \$ 5,633 \\\hline\end{array}$$ What is the amount of deductions for AGI that Scott can claim this year (2016)?