MrAnd MrsThibodeaux (Both Age 35),who Are Filing a Joint Return,have Adjusted

question 82

Multiple Choice

Mr.and Mrs.Thibodeaux (both age 35) ,who are filing a joint return,have adjusted gross income of $90,000 in 2019.During the tax year,they paid the following medical expenses for themselves and for Mrs.Thibodeaux's mother,Mrs.Watson (age 63) .Mrs.Watson provided over one-half of her own support. $\begin{array}{|l|l|}\hline \text { Prescription drugs for } \mathrm{Mr} & \\\text { Thibodeaux } & \$ 3,600\\\hline \text { General vitamins for Mrs. } & \\\text { Thibodeaux } & \$ 100 \\\hline \text { Doctor bill for Mr. Thibodeaux } & \$ 1,800 \\\hline \text { Doctor bill for Mrs. Thibodeaux } & \$ 4,000 \\\hline \text { Hospital bill for Mrs. Watson } & \$ 2,200\\\hline \end{array}$ Mr.and Mrs.Thibodeaux received no reimbursement for the above expenditures.What is the amount of their deductible itemized medical expenses?

• A)$400
• B)$500
• C)$2,600
• D)$9,400

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Definitions:

Nonconvertible Bonds

Bonds that cannot be converted into the issuing company's stock and must be repaid in cash at maturity.

Warrants

Derivative securities that provide the right, but not the obligation, to buy shares of a company at a specified price before the warrant expires.

Convertible Securities

Convertible securities are financial instruments, like bonds or preferred shares, that can be converted into a predetermined number of common stock or equity shares.

Call Options

Financial contracts that give the holder the right, but not the obligation, to buy an asset at a specified price within a specific time period.