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Four Accounting Problems




Question;1. LO.2 Barbara incurred the following expenses during the year: $840 dues at a health club she joined at the suggestion of her physician to improve her general physical condition, $240 for multiple vitamins and antioxidant vitamins, $500 for a smoking cessation program, $240 for nonprescription nicotine gum, $600 for insulin, and $7,200 for funeral expenses for her mother who passed away in June. Which of these expenses may be included in computing the medical expense deduction?2. LO.2 David, a sole proprietor of a bookstore, pays a $7,500 premium for medical insurance for him and his family. Joan, an employee of a small firm that doesn?t provide her with medical insurance, pays medical insurance premiums of $8,000 for herself. How does the tax treatment differ for David and Joan?20.LO.3 Susan traveled to rural Tennessee during the year to do volunteer work for one week for Habitat for Humanity. She normally receives $2,000 salary per week at her job and is planning to deduct the $2,000 as a charitable contribution. In addition, Susan incurred the following costs in connection with the trip: $300 for transportation, $700 for lodging, and $250 for meals. What is Susan?s deduction associated with this charitable activity?4. LO.3 Explain the meaning of the terms active income, portfolio income, and passive income.


Paper#40289 | Written in 18-Jul-2015

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