Larry and Beth Are Married and Together Have AGI of $80,000

question 19

Multiple Choice

Larry and Beth are married and together have AGI of $80,000 in 2010.They have two dependents and file a joint return.They pay $3,000 for a high deductible health insurance policy and they contribute $2,400 to a qualified Health Savings Account.During the year,they paid the following amounts for medical care: $7,500 in physician and dentist bills and hospital expenses,and $1,700 for prescribed medicine and drugs.In November 2010,they received an insurance reimbursement of $2,100 for hospitalization.They expect to receive an additional reimbursement of $1,000 in January 2011.Determine the maximum deduction allowable for medical expenses in 2010.

• A)$4,100.
• B)$6,100.
• C)$7,100.
• D)$10,100.
• E)None of the above.

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Definitions:

Stockholders' Equity Statement

A financial statement that shows the changes in the equity of a company's shareholders over a specific period.

Balance Sheet

A financial statement that provides a snapshot of a company's financial position at a specific point in time, showing its assets, liabilities, and shareholders' equity.

Common Stock Split

A corporate action to divide its existing shares into multiple shares to boost the liquidity of the shares, though the market capitalization remains the same.

Stockholders' Equity

Stockholders' Equity is the residual interest in the assets of a corporation that remains after deducting its liabilities, representing ownership interest in a company.