Asked by Manuel De Sousa on Jun 04, 2024
Verified
Isaiah an NBA point guard,is advised by his physician to install a Jacuzzi in his residence since he is afflicted with a back problem incurred after years of running up and down the court.The cost of installing the Jacuzzi is $6,500.He installs the Jacuzzi in January of 2017,and it increases the value of his residence by $3,500.Disregarding the limitation based on adjusted gross income,how much of the cost of the Jacuzzi may Isaiah take into account in determining his medical expense deduction for 2017?
A) $3,000.
B) $3,500.
C) $6,500.
D) $10,000.
Medical Expense Deduction
An itemized deduction for taxpayers who have incurred significant medical and dental expenses exceeding a certain percentage of their adjusted gross income.
Jacuzzi
A brand name often used generically to refer to any hot tub or whirlpool bath with underwater jets that massage the body.
Adjusted Gross Income
Adjusted Gross Income, or AGI, is an individual's total gross income minus specific deductions, used to determine taxable income on an income tax return.
- Evaluate the eligibility for deducting medical expenses and understand the restrictions tied to adjusted gross income.
Verified Answer
MF
Mariana FonsecaJun 07, 2024
Final Answer :
A
Explanation :
According to IRS rules, the cost of a Jacuzzi can be included as a medical expense if it is primarily for medical care to alleviate or prevent a physical or mental disability or illness. In this case, since the Jacuzzi was installed solely for medical reasons, Isaiah can deduct the cost that exceeds the increase in the value of his residence due to the installation of the Jacuzzi. Therefore, he can deduct $3,000 ($6,500 - $3,500) as a medical expense on his tax return for 2017.
Learning Objectives
- Evaluate the eligibility for deducting medical expenses and understand the restrictions tied to adjusted gross income.