Austin, a Single Individual with a Salary of $100,000, Incurred

question 21

Essay

Austin, a single individual with a salary of $100,000, incurred and paid the following expenses during the year:
$\begin{array}{lr}\text { Medical expenses } & \$ 5,000 \\\text { Alimony } & 24,000 \\\text { Charitable contributions } & 2,000 \\\text { Casualty loss (after } \$ 100 \text { floor) } & 1,000 \\\text { Mortgage interest on personal } & 4,500 \\\text { Property taxes on personal residence } & 4,200 \\\text { Moving expenses } & 2,500 \\\text { Contribution to a traditional IRA } & 4,000 \\\text { Sales taxes (no state or local income } & \\\quad \text { tax is imposed) } & 1,300\end{array}$
Calculate Austin's deductions for AGI.

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Definitions:

Unemployment

A situation where individuals who are capable and willing to work are unable to find jobs.

Interest Rates

The percentage charged on the total amount of borrowed money, reflecting the cost of debt for the borrower and the return on investment for the lender.

Unintended Inventory Changes

Variations in stock levels that occur when actual sales differ from anticipated sales, not resulting from planned actions by businesses.

Keynesian Models

Economic theories that emphasize the total spending in the economy and its effects on output and inflation, developed by John Maynard Keynes.