Paul and Patty Black (Both Are Age 66) Are Married

question 40

Essay

Paul and Patty Black (both are age 66) are married and together have AGI of $105,000 in 2017. They have two dependents and file a joint return. During the year, they paid $8,000 for medical insurance, $15,000 in doctor bills and hospital expenses, and $1,000 for prescribed medicine and drugs.
a.In December 2017, the Blacks received an insurance reimbursement of $3,500 for hospitalization expenses. Determine the deduction allowable for medical expenses paid during the year.
b.Assume instead that the Blacks received the $3,500 insurance reimbursement in February 2018. Determine the deduction allowable for medical expenses incurred in 2017.
c.Assume that the Blacks received the $3,500 insurance reimbursement in February 2018. Discuss whether the reimbursement will be included in their gross income for 2018.

Understand and calculate exchange rates and their effects on currency value.

Apply exchange rate calculations to determine the cost of goods in different currencies.

Calculate the percentage increase or decrease in prices or costs.

Understand the concept of Consumer Price Index (CPI) and its applications in real life.

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Definitions:

Counterclaim

A statement of claim by the defendant alleging that the plaintiff is responsible for the losses suffered and claiming back against the plaintiff for those losses.

Civil Law Suit

A legal action initiated by one party against another for the enforcement or protection of a private right or for compensation for a wrong in areas governed by civil law.

Counterclaim

A claim made to offset another claim in a legal action, essentially a defendant’s claim against the plaintiff.

Examination for Discovery

A pre-trial process where parties in a lawsuit have the opportunity to question each other or witnesses under oath.