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:

Sensation

The process by which sensory receptors and the nervous system receive and represent stimulus energies from the environment.

Light Bulb

A device that produces light from electricity, consisting of a filament housed in a glass vacuum or filled with inert gas, illuminating when electric current passes through.

False Alarm

A situation where a warning or alert is given, but no actual threat or danger exists.

Correct Rejection

In signal detection theory, the decision that a signal is not present when it truly is absent.