You bought a house in 2004 for $150,000. Sadly, you suffered an injury. Your doctor prescribes wateraerobics as your therapy and prescribes building a pool. You spend $31,000 to build the pool. Becauseyou built the pool your house now appraises for $165,000. Assume all of your other injury related costswere covered by your health insurance, which you pay $4,400 a year for. If your AGI is $200,000, whatis your allowable medical expense deduction?○ $40000$20,400$35,400$0$5,400

Here I suffered an injury and doctor prescribed water aerobics as physical therapy. So the cost of…

Answered: You bought a house in 2004 for…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Linda installed special pool for the hydrotherapeutic treatment of severe arthritis, as prescribed by her doctor. The cost of installing the pool was $20,000, and her insurance company paid $5,000 toward its cost. The pool increased the value of Linda's house by $7,000, and it has a useful life of 10 years. How much of a deduction (before any AGI limitations) is Linda entitled to in the year of installation of the pool?$
Susan and Raphael Galego have completed Step 1 of their needs analysis worksheet and determined that they need $3,522,000 to maintain the projected lifestyle of Raphael (age 41) and their two children (ages 7 and 11) in the event of Susan’s (the primary earner’s) death. The Galegos also have certain financial resources available after Susan’s death, however, so their life insurance needs are lower than this amount. If Susan dies, Raphael will be eligible to receive Social Security survivors’ benefits—approximately $3,500 a month ($42,000 a year) until the youngest child graduates from high school in 9 years. After the children leave home, Raphael will be able to work full-time and earn an estimated $52,000 a year (after taxes) until he retires at age 65. After Raphael turns 65, he’ll receive approximately $3,100 a month ($37,200 a year) from his own Social Security and retirement benefits. The life expectancy for a man within Raphael’s demographic is 80. The couple has also saved…
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Ray had a terminal illness that would require almost constant nursing care for the remaining two years of his estimated life, according to his doctor. Albert had a life insurance policy with a face amount of $100,000. He had paid $25,000 of premiums on the policy. The insurance company has offered to pay him $80,000 to cancel the policy, although its cash surrender value was only $55,000. He accepted the $80,000. Albert used $15,000 to pay his medical expenses. Albert made a miraculous recovery and lived another 20 years. As a result of cashing in the policy: a.Albert must recognize $55,000 of gross income, but he has $15,000 of deductible medical expenses. b.Albert must recognize $65,000 ($80,000 – $15,000) of gross income. c.Albert is not required to recognize any gross income because of his terminal illness. d.Albert must recognize $40,000 ($80,000 – $25,000 – $15,000) of gross income.
You interviewed a new client and these were the facts provided. Provide them with a brief explanation of tax reason for each Jerry was injured playing football and his parents paid for the physical therapy that cost them $ 4000 above what the health insurance paid, braces for Julie for the final year cost $2200. The parents have 2 health insurance plans, Stacy from her employer paid plan that covers her and the children. Charles has a self- emploved insurance plan that he pays $9000 a vear through his business.
Last year, Dani maximized her TFSA contribution limit by contributing $30,000 to her TFSA. This year, her contribution limit is $7,000. The $30,000 that Dani contributed last year has grown to $32,000. She contributed nothing this year but withdrew the entire amount of $32,000. Assuming next year's limit is also $7,000 how much can Dani contribute to her TFSA next year?
Charlene, a chemist, worked in a chemistry lab and earned $60,000 per year. Charlene quit in order to start her own business. To buy the necessary equipment, she withdrew $50,000 from her savings, (which paid two percent interest per year) and borrowed $60,000 from her Aunt Bea, whom she pays five percent interest per year. Last year she paid $48,000 for ingredients and paid all of the interest on the loan from her aunt. She had revenue of $124,000. For last year, Alvin, the accountant, says Charlene’s profit is ________ and Emily the economist, says Charlene’s profit is ________. $76,000; $12,000 $73,000; $14,000 $73,000; $12,000. $73,000; $13,000. $72,000; $13,000.
Below is your client’s actual list of her family’s unreimbursed medical ex-penses for the year. Of course she wants to deduct everything, so it’s up to you to tell her which items really are deductible as medical expenses. (Ignore the % of AGI floor.) My Family’s Medical Expenses: (A) Aspirin (B) Contact lenses (C) Medical marijuana (bought in Oklahoma – it’s legal!) (D) Veterinary bills (for “Whiskers” the cat, but she’s family, too!) (E) Acupuncture (it worked!) (F) Sunscreen (preventing skin cancer!) (G) Botox injections (Wonderful for my mental health – I look 10 years younger!) (H) Running shoes (heart health!) (I) Viagra (brought home from Mexico, much cheaper!) (J) Mileage for driving to/from doctors’ offices (K) Birth control pills (L) Parking at the hospital (visiting Aunt Mary) (M) Massage therapy (at the Elizabeth Arden “Red Door” Salon, wonderful!) (N) A book on meditation and self-hypnosis (I now feel so calm and serene!).…
Donna is 84 years old and needs to move to an assisted living care facility. Her health is not great, so you are using a life expectancy of 6 years. She has investments totalling $200,000 in mostly low yielding savings accounts. Her pension income amounts to $3,000 per month, received at the beginning of each month (this excludes any income from her investments). Donna has found several places to live but the monthly cost is quite high, and she doesn't know if she can afford any of them. Donna wants to know the maximum amount she can afford to spend per month (payment at beginning of month) if she has no other monthly expenses. Assume you can invest her $200,000 and earn 5% compounded monthly.

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