Richard, Age 50, Is Employed as an Actuary $\text {Medical insurance premiums} \quad\$ 5,300$

question 84

Multiple Choice

Richard, age 50, is employed as an actuary.For calendar year 2019, he had AGI of $130,000 and paid the following medical expenses: $\text {Medical insurance premiums} \quad\$ 5,300$ $$\begin{array} { l r } \text { Doctor and dentist bills for Derrick and Jane (Richard's parents) } & 7,900 \\\text { Doctor and dentist bills for Richard } & 5,100 \\\text { Frescribed medicines for Richard } & 830 \\\text { Nonprescribed insulin for Richard } & 960\end{array}$$ Derrick and Jane would qualify as Richard's dependents except that they file a joint return.Richard's medical insurance policy does not cover them.Richard filed a claim for $4,800 of his own expenses with his insurance company in November 2019 and received the reimbursement in January 2020.What is Richard's maximum allowable medical expense deduction for 2019?

• A)$0
• B)$7,090
• C)$10,340
• D)$20,090
• E)None of these

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Definitions:

Direct Materials

Raw materials that are directly traceable and contribute to the finished product in a manufacturing process.

Total Cost

The complete sum of all expenses incurred in producing a product or delivering a service, including both fixed and variable costs.

FIFO Process Cost Method

An inventory valuation method that assumes the first items produced or acquired are the first sold or used, standing for "First-In, First-Out."

Equivalent Units

A concept in cost accounting used to express the amount of materials or labor in terms of complete units of production.