Hector Is a Married Self-Employed Taxpayer, and This Year He

question 107

Multiple Choice

Hector is a married self-employed taxpayer, and this year he paid $3,000 for his health insurance premiums. Under which of the following alternative conditions can Hector deduct the cost of the premiums for AGI?

• A) Hector chose not to participate in the employer-sponsored plan of his spouse.
• B) Hector's spouse participates in an employer-sponsored plan but Hector is not eligible to participate in this plan.
• C) Neither Hector nor his spouse participates in an employer-sponsored plan although both are eligible to participate in a plan.
• D) Hector can deduct the health insurance premiums regardless of the insurance status of his spouse.
• E) None of the above - health insurance premiums can only be deducted as an itemized deduction.

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Definitions:

Purely Competitive

A market structure defined by a large number of sellers offering identical or very similar products, leading to a high level of competition and prices determined by supply and demand.

Purely Competitive

A market structure characterized by a large number of small firms, homogeneous products, and free entry and exit, leading to price takers rather than price makers.

Imperfectly Competitive

Describes a market structure where firms have some degree of market power and can influence prices, unlike in perfect competition.

Purely Competitive

A market structure characterized by a large number of small firms, homogenous products, and easy entry and exit, leading to firms being price takers.