1. Federal Income Tax Personal (Itemized) Deductions

2. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 2 Business Personal

3. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 3 Personal

4. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 4 Itemized Deductions See text page 7-36 Medical Taxes Interest Charitable Contributions Casualty Losses Other

5. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 5 Itemized Deductions Medical Taxes Interest Charitable Contributions Casualty Losses Other

6. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 6 Medical Expenses Define “medical” costs –See text pg 7-3 Name as many examples as possible Name some that are NOT deductible Limits: –“out-of-pocket” costs –Reduced by 10% of AGI mitigation

7. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 7 Medical Expenses Problem 7-4

8. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 8 Problem 7-4 Which enroute costs are deductible? Any limits? Auto/Travel$.?? per mile

9. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 9 Automobile Expenses Business$.565pg 9 – 11 Moving$.24pg 9 – 20 Medical$.?? Charitable Contribution

10. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 10 Automobile Expenses Business$.565pg 9 – 11 Moving$.24pg 9 – 20 Medical $.24 pg 7 – 4 Charitable Contribution Note: $.12 in 2001 $.13 in 2002 $.12 in 2003 $.14 in 2004 $.15 $.22 in 2005 $.18 in 2006 $.20 in 2007 $.19 in 2008 $.27 $.20 in 2009 $.165 in 2010 $.19 in 2011 $.23 in 2012

11. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 11 Problem 7-4 Which enroute costs are deductible? Any limits? Auto/Travel$.24 per mile Meals

12. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 12 Problem 7-4 Which enroute costs are deductible? Any limits? Auto/Travel$.24 per mile Meals50% Hotel

13. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 13 Problem 7-4 Which enroute costs are deductible? Any limits? Auto/Travel$.24 per mile Meals50% Hotel$50 per night

14. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 14 Medical Expenses Problem 7-4 Problem 7-5

15. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 15 Problem 7-5 Meals? –Not deductible See also Pub 17, p. 145 Meals and lodging as outpatient?

16. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 16 Problem 7-5 Meals? –Not deductible See also Pub 17, p. 145 Meals and lodging as outpatient? Lodging ? –$50 per night

17. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 17 Medical Expenses Problem 7-4 Problem 7-5 Problem 7-38

18. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 18 Problem 7-38 Issue? Define “medical dependent” –Regular dependent = 5 tests –Medical dependent = 3 tests All except GI and joint return Page 7-2, 7-8 $6,400 less 10% = $4,000

19. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 19 Medical Expenses Problem 7-4 Problem 7-5 Problem 7-38 Problem 7-35

20. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 20 Problem 7-35

21. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 21 Problem 7-35

22. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 22 Problem 7-35

23. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 23 Problem 7-35

24. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 24 Problem 7-35

25. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 25 Problem 7-35

26. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 26 Problem 7-35

27. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 27 Problem 7-35

28. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 28 Problem 7-35

29. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 29 Problem 7-35

30. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 30 Medical Expenses Problem 7-4 Problem 7-5 Problem 7-38 Problem 7-35 Problem 7-36

31. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 31 Problem 7-36

32. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 32 Problem 7-36

33. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 33 Problem 7-36

34. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 34 Problem 7-36

35. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 35 Problem 7-36

36. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 36 Problem 7-36 Must include “tax benefit.”

37. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 37 Medical Expenses Problem 7-4 Problem 7-5 Problem 7-38 Problem 7-35 Problem 7-36 Another Illustration

38. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 38 Another Illustration Part I: During the current year, Melanie is involved in an automobile accident and incurs the following expenditures: Doctor bills$11,000 Hospital bills13,000 Melanie is single and has no dependents. Her salary is $40,000, and other itemized deductions are $2,800. Melanie also receives a reimbursement of $17,000 from the insurance company for medical expenses incurred in connection with the accident. What is Melanie’s taxable income for the current year?

39. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 39 Another Illustration

40. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 40 Another Illustration

41. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 41 Another Illustration

42. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 42 Another Illustration

43. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 43 Another Illustration

44. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 44 Another Illustration

45. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 45 Another Illustration

46. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 46 Another Illustration Remember This

47. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 47 Another Illustration Part II: Assume all the same facts, and assume in the following year Melanie receives an additional $6,000 in settlement of a lawsuit arising because of the automobile accident. The settlement is to pay Melanie for the medical expenses incurred because of the accident that were not covered by insurance. What is the proper treatment of this $6,000 settlement?

48. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 48 Another Illustration

49. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 49 Another Illustration

50. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 50 Another Illustration

51. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 51 Another Illustration

52. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 52 Another Illustration Remember This

53. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 53 Another Illustration Must include “tax benefit.”

54. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 54 Medical Expenses Problem 7-4 Problem 7-5 Problem 7-38 Problem 7-35 Problem 7-36 Problem 7-39

55. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 55 Problem 7-39

56. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 56 Problem 7-39

57. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 57 Problem 7-39

58. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 58 Problem 7-39

59. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 59 Problem 7-39

60. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 60 Problem 7-39

61. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 61 Problem 7-39

62. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 62 Problem 7-39

63. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 63 Problem 7-39

64. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 64 Problem 7-39

65. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 65 Problem 7-39

66. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 66 Problem 7-39

67. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 67 Problem 7-39

68. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 68 Problem 7-39

69. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 69 Problem 7-39 -$9,000

70. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 70 Problem 7-39 +$9,000 “tax benefit”

71. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 71 Problem 7-39

72. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 72 Problem 7-39

73. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 73 Itemized Deductions Medical Taxes Interest Charitable Contributions Casualty Losses Other

74. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 74 Taxes Deductible –Property taxes –State income tax –Local income tax Not Deductible –Federal taxes –Sales tax –Excise taxes

75. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 75 Taxes Deductible –Property taxes –State income tax –Local income tax Not Deductible –Federal taxes –Sales tax * –Excise taxes

76. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. © Copyright 2001-2005 by M. Ray Gregg. All rights reserved. 76 Sales Tax Update On Oct, 11, 2004 the Senate by a vote of 69-17, approved H.R. 4520, the "American Jobs Creation Act of 2004," clearing the way for the President's expected signature of the measure. The House approved the measure on Oct. 7 by a vote of 280-141. http://ria.thomson.com/taxwatch/default.asp

77. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. © Copyright 2001-2005 by M. Ray Gregg. All rights reserved. 77 Sales Tax Update Most of the 633 pages of the American Jobs Creation Bill of 2004 dealt with taxes on and tax breaks for businesses. But sandwiched in the tax tome [A book, especially a large or scholarly one], approved by Congress and signed into law by the president, is the OK for consumers to deduct sales taxes from their federal filings. The deduction will be available on 2004 and 2005 tax returns. http://www.bankrate.com/brm/itax/20041012b1.asp

78. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. © Copyright 2001-2005 by M. Ray Gregg. All rights reserved. 78 Sales Tax Update “This tax break isn't an add-on; it will require you to choose. You must decide whether you want to deduct the sales taxes you paid or your state income tax amounts.” “The choice is obvious for residents of the seven states that do not collect state income taxes but do levy state sales taxes: Florida, Nevada, South Dakota, Tennessee, Texas, Washington and Wyoming.” http://www.bankrate.com/brm/itax/20041012b1.asp

79. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 79 Taxes Problem 7-40

80. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 80 Problem 7-40 1/1 12/31 2012

81. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 81 Problem 7-40 1/1 4/11 12/31 Pd $120 2012

82. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 82 Problem 7-40 1/1 12/31 Employer w/h $1,600 2012 4/11 Pd $120

83. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 83 Problem 7-40 1/1 4/11 4/1312/31 Employer w/h $1,600 Pd $120 $200 2012

84. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 84 Problem 7-40 1/1 4/11 4/1512/31 Employer w/h $1,600 Pd $120 $200 Amount deductible? 2012

85. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 85 Problem 7-40 1/1 4/11 12/31 Employer w/h $1,600 Pd $120 Did she itemize? 2012

86. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 86 Problem 7-40 1/1 4/11 12/31 Employer w/h $1,600 Pd $120 $1,600 + $120 < SD 2012

87. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 87 Problem 7-40 (b) 1/1 12/31 2013

88. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 88 Problem 7-40 (b) 1/1 12/31 Employer w/h $2,100 2013

89. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 89 Problem 7-40 (b) 1/1 4/13 12/31 Employer w/h $2,100 Pd $200 2013

90. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 90 Problem 7-40 (b) 1/1 4/13 4/1512/31 Employer w/h $2,100 Pd $200 Rfd $450 2013

91. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 91 Problem 7-40 (b) 1/1 4/13 4/1512/31 Employer w/h $2,100 Pd $200 Rfd $450 Amount deductible? 2013

92. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 92 Problem 7-40 (b) 1/1 4/13 12/31 Employer w/h $2,100 Pd $200 $2,100 + $200 = $2,300 2013

93. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 93 Problem 7-40 (b) 1/1 4/13 12/31 Employer w/h $2,100 Pd $200 Did she itemize? 2013

94. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 94 Problem 7-40 (b) 1/1 4/13 12/31 Employer w/h $2,100 Pd $200 $2,300 + $5,500 > SD 2013

95. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 95 Problem 7-40 (c) AGI$51,000 From:Item Ded$7,800 Exemption 3,900 11,700 Taxable Income$39,300 2013

96. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 96 Problem 7-40 (c) AGI$51,000 From:Item Ded$7,350 Exemption 3,900 11,250 Taxable Income$39,750 2013 - revised

97. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 97 Problem 7-40 (d) AGI$53,500 Add: State Tax Rfd From ’12 450 New AGI$53,950 2014

98. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 98 Taxes Problem 7-40 Problem 7-41

99. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 99 Problem 7-41 1/1 4/13 12/31 Employer w/h $2,100 Pd $200 $2,100 + $200 = $2,300 2011 99

100. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. © Copyright 2001-2005 by M. Ray Gregg. All rights reserved. 100 Problem 7-41 1/1 4/13 12/31 Employer w/h $2,100 Pd $200 $2,100 + $200 = $2,300 2011 100

101. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 101 Problem 7-41 2013 State Income Tax$2,300 Mortgage Interest 3,000 Total Item Ded$5,300 101

102. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 102 Problem 7-41 2013 Gross Income$51,000 Total Item Ded$5,300 Exemption 3,200 9,500 Taxable Income$41,500 102

103. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 103 Problem 7-41 2013 Gross Income$51,000 Std Ded$6,100 Exemption 3,200 9,500 Taxable Income$41,500 103

104. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 104 Problem 7-41 2013 Gross Income$51,000 Std Ded$6,100 Exemption 3,900 10,000 Taxable Income$41,000 104

105. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 105 Problem 7-41 (b) AGI$53,500 Add: State Tax Rfd From ’13* 0 New AGI$53,500 2014 105 * No effect since she used standard deduction.

106. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 106 Taxes Problem 7-40 Problem 7-41 Problem 7-42

107. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 107 Problem 7-42 Total Deductible Fed Taxes W/H$5,400 State Tax W/H2,000$2,000 FICA Tax W/H3,800 Sales Tax on Car600 License70 Prop Tax on Car2%

108. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 108 Problem 7-42 Total Deductible Fed Taxes W/H$5,400 State Tax W/H2,000$2,000 FICA Tax W/H3,800 Sales Tax on Car600 License70 Prop Tax on Car2%400 Prop Tax on Car$10/100#

109. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 109 Problem 7-42 Total Deductible Fed Taxes W/H$5,400 State Tax W/H2,000$2,000 FICA Tax W/H3,800 Sales Tax on Car600 License70 Prop Tax on Car2%400 Prop Tax on Car$10/100# Prop Tax on House1,850???

110. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 110 Problem 7-42 1/1 4/15 12/31 Taxes $1,850 for year 31 28 31 14 104

111. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 111 Problem 7-42 1/1 4/15 12/31 $527 31 28 31 14 104

112. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 112 Problem 7-42 Total Deductible Fed Taxes W/H$5,400 State Tax W/H2,000$2,000 FICA Tax W/H3,800 Sales Tax on Car600 License70 Prop Tax on Car2%400 Prop Tax on Car$10/100# Prop Tax on House1,850 527 Total$2,927

113. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 113 Taxes Problem 7-40 Problem 7-41 Problem 7-42 Problem 7-43

114. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 114 Problem 7-43 6/30 $6,000 5/1

115. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 115 Problem 7-43 (a) 6/30 $6,000 5/1 Janet (buyer): $6,000 x 61/365 = $1,003 ???

116. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 116 Problem 7-43 (b) 6/30 $6,000 5/1 Janet (buyer): $6,000 x 61/365 = $1,003 Tara (seller): $6,000 x 304/365 = $4,997

117. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 117 Problem 7-43 (c) Janet (buyer): $6,000 x 61/365 = $1,003 Tara (seller): $6,000 x 304/365 = $4,997 Tara’s sales price = $500,000 + $4,997 Janet’s purchase price = $500,000 + $4,997

118. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 118 Itemized Deductions Medical Taxes Interest Charitable Contributions Casualty Losses Other

119. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 119 Interest Page 1, line 33ForStudent Loan Schedule AFromHome Mortgage Not Personal Schedule AFromInvestment Not Passive Schedule CForBusiness

120. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 120 Interest Page 1, line 33ForStudent Loan Schedule AFromHome Mortgage Not Personal Schedule AFromInvestment Not Passive Schedule CForBusiness

121. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 121 Interest Problem 7-14 How is the classification determined? –Collateral? –Use? Use

122. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 122 Interest Problem 7-14 Investment Interest Illustration

123. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 123 Investment Interest Investment interest deductible to the extent of “net investment income.” “Net Investment Income” determined as follows: II -IE =NII

124. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 124 Investment Interest Illustration During the current year, David reports interest and dividend income of $18,000, net short-term capital gains of $6,000, and net long-term capital gains of $7,000. His AGI is $120,000. His investment expenses, exclusive of interest, are $5,000. During the year David also pays a total of $55,000 interest on debt incurred on his investment activities. David is married and files a joint return. a.What is the total amount of deduction Dave may take with respect to his investment interest expense if he does not make a special election?

125. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 125 Illustration (a)

126. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 126 Illustration (a)

127. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 127 Illustration (a)

128. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 128 Illustration (a)

129. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 129 Illustration (a)

130. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 130 Illustration (a)

131. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 131 Investment Interest Illustration During the current year, David reports interest and dividend income of $18,000, net short-term capital gains of $6,000, and net long-term capital gains of $7,000. His AGI is $120,000. His investment expenses, exclusive of interest, are $5,000. During the year David also pays a total of $55,000 interest on debt incurred on his investment activities. David is married and files a joint return. a.What is the total amount of deduction Dave may take with respect to his investment interest expense if he does not make a special election? b.What is the treatment of any disallowed investment interest expense?

132. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 132 Illustration (b)

133. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 133 Investment Interest Illustration During the current year, David reports interest and dividend income of $18,000, net short-term capital gains of $6,000, and net long-term capital gains of $7,000. His AGI is $120,000. His investment expenses, exclusive of interest, are $5,000. During the year David also pays a total of $55,000 interest on debt incurred on his investment activities. David is married and files a joint return. a.What is the total amount of deduction Dave may take with respect to his investment interest expense if he does not make a special election? b.What is the treatment of any disallowed investment interest expense? c.What is the total amount of deduction David may take with respect to his investment interest expense if he elects to have his net capital gain taxed at the regular marginal tax rates?

134. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 134 Illustration (c)

135. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 135 Illustration (c)

136. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 136 Illustration (c)

137. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 137 Interest Problem 7-14 Investment Interest Illustration Problem 7-49

138. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 138 Problem 7-49 a. ($12,000 - $10,200) = $1,800 $1,800  4 = $450 $450 x 2 = $900 b. None – no payments made c. $1,800 x 9/12 = $1,350

139. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 139 Itemized Deductions Medical Taxes Interest Charitable Contributions Casualty Losses Other

140. © Copyright 2001-2013 by M. Ray Gregg. All rights reserved. 140