For Each of the Following Situations,determine Whether the Item Is

question 107

Essay

For each of the following situations,determine whether the item is deductible,how it would be deducted on the taxpayer's return (if there are alternatives possible,discuss the conditions that would determine the treatment)and any limitations,which might be placed on the deduction.
a.Tony and Rika are married and file a joint return. Only Tony is covered by an employee-sponsored pension plan and their adjusted gross income is $184,000. Determine their maximum IRA contribution and deduction for the current year.
b.Elise graduated from Southern University in May of 2015 and immediately started working as a financial analyst for Simone Financial Group. To finance her college education, she borrowed $30,000 from a local bank. In January of 2016, she begins paying back her student loans and pays $2,400 of interest expense during the year. Her adjusted gross income for the year is $63,000.
c.During the current year, Rowland accepts a job as a computer programmer with Davenport Industries. He incurs the following expenses in moving from East Brunswick, New Jersey to Durham, North Carolina. Davenport Industries reimburses him $4,000 for his move.Transportation of household goods$2,800Airfare340Temporary living:Lodging430Meals120House-hunting trip:Transportation330Lodging280Meals110

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Definitions:

Fascia

A band or sheet of connective tissue, primarily collagen, beneath the skin that attaches, stabilizes, encloses, and separates muscles and other internal organs.

Adipose

A type of body tissue containing stored fat, serving both as a source of energy and a cushion for bodily organs.

Meninges

The three layers of protective tissue called the dura mater, arachnoid, and pia mater that surround the brain and spinal cord.

Muscle

A tissue in animal bodies composed of fibers capable of contracting to effect bodily movement.