Wally and Gloria incur and pay medical expenses in excess of insurance
reimbursements during the year as follows:
For Wally $11,000
For Gloria (spouse) $4,000
For Chuck (son) $15,000
For Carter (Gloria's father) $13,000
Wally and Gloria's AGI is $200,000. They file a joint return. Chuck and Carter are Wally and Gloria's dependents.
a. What is Wally and Gloria's medical expense deduction for regular income tax purposes?
b. What is Wally and Gloria's medical expense deduction for AMT purpose?
c. What is the amount of AMT adjustment for medical expenses?
a. Total medical of $43,000 is subject to a 7.5% limitation on AGI. $43,000 - 15,000 (200,000 x 7.5%) = ...
The solution includes a calculation of amounts allowable as deductions for both regular tax and for AMT income. Together with the solutions are explanations to support the responses.