Question

A calendar year taxpayer purchased land and a residential building for $20,000,000 on November 22, 2015.  It was determined that 25% of the purchase price would be allocated to the land. What is the residential buildings adjusted tax basis on December 31, 2018 (rounded to the nearest $500)?

A. $4,432,000.
B. $13,167,000.
C. $13,295,500.
D. $13,363,500.
E. $18,363,500.

2. Ralph is employed as a bus driver.  For calendar year 2019, he had AGI of $110,000 and paid the following medical expenses:

Doctor and Dentist bills - $5,000

Prescription medicine - $2,000

Knee replacement surgery - $12,500

Contact Lenses - $500

Over the counter (non-prescription medicine) $75

As the request of his doctor, he put a pool in the backyard at a cost of $8,500.  The value of the home improved by $6,000 as a result of the addition.  What is the amount of deductions on Schedule that Ralph can claim after applying all limitations?

A. $10,000.
B. $28,575.
C. $22,575.
D. $11,575.
E. $11,500.