Question

Problem 10-24 (LO. 2) 

Paul, suffers from emphysema and severe allergies and, upon the recommendation of his physician, has a dust elimination system installed in his personal residence. In connection with the system, Paul incurs and pays the following amounts during 2019: 

Doctor and hospital bills $4,500

Dust elimination system  10,000

Increase in utility bills due to the system 450

Cost of certified appraisal  300 

In addition, Paul pays $750 for prescribed medicines. 

The system has an estimated useful life of 20 years. The appraisal was to determine the value of Paul's residence with and without the system. The appraisal states that his residence was worth $350,000 before the system was installed and $356,000 after the installation. Paul's AGI for the year was $50,000. 

a. What is the total of Paul's qualifying medical expenses for 2019? 

b. What is his medical expense deduction for 2019?  

Answer 1

Doctor and Hospital Bills	$ 4,500
Increase in utility bills	$    450
Prescribed Medicines	$    750
Cost of installation in excess of increased value	$ 4,000
Qualifying Medical Expense for 2019	$ 9,700
Medical Expenses Deduction for 2019 ($9,700-$50,000*10%)	$ 4,700

Answer 2

A. $9700

B.$9700 - ($50,000 x 7.5) = $5,950