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    Medical deductions for regular tax and AMT tax

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    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?

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    Solution Preview

    a. Total medical of $43,000 is subject to a 7.5% limitation on AGI. $43,000 - 15,000 (200,000 x 7.5%) = ...

    Solution Summary

    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.