Question

26. Katia pays the following medical expenses this year:

•   $2,000 for doctor bills for Katia's son who is claimed as a dependent by Katia's former spouse.

•   $500 for Katia's eyeglasses.

•   $1,200 for Katia's dental work.

•   $5,000 for Katia's face lift. Katia, a teacher, is worried about the wrinkles around her eyes.

How much can Katia include on her return as qualified medical expenses before limitation?

A) $2,000

B) $2,500

C) $3,700

D) $8,700

27. In February of the current year (assume a non-leap year), Miguel and Perla received their property tax statement for last calendar-year taxes of $3,000, which they paid to the taxing authority on March 1 of the current year. They had purchased their home on April 1 last year. What amount of property tax on this statement may they claim as an itemized deduction this year (rounded)?

A) $0

B) $800

C) $1,074

D) $2,260  

28. Which of the following is deductible as interest expense?

A) personal credit card interest

B) interest to purchase tax-exempt bonds

C) bank service charges on personal account

D) interest on a the purchase of a home (principal residence).

Answer 1

26. Option C $ 3,700 is the correct answer.

Explanation: $ 5,000 paid for face lift cannot be deducted because medical expenses for cosmetic surgery; specifically, procedures undergone with the intention to merely enhance your appearance is not allowed

27. Option D $ 2,260 is the correct answer

Explanation: $ 3000 x (275 Days / 365 Days) = $ 2,260

28. Option D is the correct answer

Interest on a the purchase of a home (principal residence)

Explanation: Interest on home equity loans is deductible.