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o $2,200 in copays for doctor visits and tests, o $400 for over the counter medication, and o $100 for Personal Protective Equipment (PPE) to prevent the spread of COVID-19 and home COVID-19 tests • In April 2023, Luther was diagnosed by his physician with a terminal illness. In May, Luther and Lexi decided to take vacation before his health deteriorated. They used a distribution from Luther's IRA to pay for it. They received a Forr showing $15,000 in Box 1, and code 1 in Box 7. • Lexi sold a used handbag on an online marketplace. She received a Form 1099-K reporting the $700 sale. She origin $1,000 for the bag. 9. According to the Form 1099-K FAQs on IRS.gov, on Form 1040, Schedule 1, Lexi should report $700 on the Other In

o $2,200 in copays for doctor visits and tests, o $400 for over the counter medication, and o $100 for Personal Protective Equipment (PPE) to prevent the spread of COVID-19 and home COVID-19 tests • In April 2023, Luther was diagnosed by his physician with a terminal illness. In May, Luther and Lexi decided to take vacation before his health deteriorated. They used a distribution from Luther's IRA to pay for it. They received a Forr showing $15,000 in Box 1, and code 1 in Box 7. • Lexi sold a used handbag on an online marketplace. She received a Form 1099-K reporting the $700 sale. She origin $1,000 for the bag. 9. According to the Form 1099-K FAQs on IRS.gov, on Form 1040, Schedule 1, Lexi should report $700 on the Other In

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Interview Notes • Luther, age 54, and Lexi, age 56, are married and file a joint return. Lexi has family coverage through her High Deductible Health Plan (HDHP) at work. In 2023, Lexi contributed $2,350 to her Health Savings Account (HSA). Luther made contributions totaling $3,000 to his HSA in 2023. Luther's Form 1099-SA shows a distribution from his HSA of $3,000. They have receipts showing they paid: o $300 for new eyeglasses for Lexi, o $2,200 in copays for doctor visits and tests, o $400 for over the counter medication, and ● o $100 for Personal Protective Equipment (PPE) to prevent the spread of COVID-19 and home COVID-19 tests • In April 2023, Luther was diagnosed by his physician with a terminal illness. In May, Luther and Lexi decided to take a luxury vacation before his health deteriorated. They used a distribution from Luther's IRA to pay for it. They received a Form 1099-R showing $15,000 in Box 1, and code 1 in Box 7. Lexi sold a used handbag on an online marketplace. She received a Form 1099-K reporting the $700 sale. She originally paid $1,000 for the bag. ● 9. According to the Form 1099-K FAQs on IRS.gov, on Form 1040, Schedule 1, Lexi should report $700 on the Other Income line and $700 on the Other Adjustments line, labeling both entries as "Form 1099-K Personal Item Sold at a Loss $700".
Transcribed Image Text:Interview Notes • Luther, age 54, and Lexi, age 56, are married and file a joint return. Lexi has family coverage through her High Deductible Health Plan (HDHP) at work. In 2023, Lexi contributed $2,350 to her Health Savings Account (HSA). Luther made contributions totaling $3,000 to his HSA in 2023. Luther's Form 1099-SA shows a distribution from his HSA of $3,000. They have receipts showing they paid: o $300 for new eyeglasses for Lexi, o $2,200 in copays for doctor visits and tests, o $400 for over the counter medication, and ● o $100 for Personal Protective Equipment (PPE) to prevent the spread of COVID-19 and home COVID-19 tests • In April 2023, Luther was diagnosed by his physician with a terminal illness. In May, Luther and Lexi decided to take a luxury vacation before his health deteriorated. They used a distribution from Luther's IRA to pay for it. They received a Form 1099-R showing $15,000 in Box 1, and code 1 in Box 7. Lexi sold a used handbag on an online marketplace. She received a Form 1099-K reporting the $700 sale. She originally paid $1,000 for the bag. ● 9. According to the Form 1099-K FAQs on IRS.gov, on Form 1040, Schedule 1, Lexi should report $700 on the Other Income line and $700 on the Other Adjustments line, labeling both entries as "Form 1099-K Personal Item Sold at a Loss $700".
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