Aaron,age 45,had AGI of $40,000 for 2014

question 26

Essay

Aaron,age 45,had AGI of $40,000 for 2014.He was injured in a skiing accident and paid $3,600 for hospital expenses and $1,400 for doctor bills.Aaron also incurred medical expenses of $1,200 for his child,who lives with his former wife and is claimed as a dependent by her.In 2015,Aaron was reimbursed $1,300 by his insurance company for the medical expenses attributable to the skiing accident.
a.Compute Aaron's deduction for medical expenses in 2014.
b.Assume that Aaron would have elected to itemize his deductions even if he had no medical expenses in 2014.How much,if any,of the $1,300 reimbursement must be included in gross income in 2015?
c.Assume that Aaron's other itemized deductions in 2014 were $7,000 and that he filed as a head of household.How much of the $1,300 reimbursement must he include in gross income in 2015?

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Definitions:

Polynomial

A mathematical expression involving a sum of powers in one or more variables multiplied by coefficients.

Perfect Square Trinomial

A trinomial that can be factored into two identical binomials, resulting from squaring a binomial.

Simple Interest

A way of calculating interest where the amount earned or paid is proportional to the initial sum invested or borrowed and the rate of interest.

Principal

The original sum of money borrowed in a loan or put into an investment, not including profits or interest.