Answer:
a. $2,700
b. $0
Explanation:
a. $2,700
The $5,000 gambling losses will not be deducted.
The transportation costs will not be deducted because it is his personal expenses.
Deductibles will include his investment fees of $2,000 and tax return fees of $1,500 and the total sum of fees must fall below 2% of his Adjusted Gross Income before any deduction can be computed.
=(2% x $40,000) = $800
=$2,000 + $1,500 – $800 = $2,700
b. $0
The $5,000 gambling losses will not be deducted.
The transportation costs will not be deducted because it is his personal expenses.
Deductibles will include his investment fees of $2,000 and tax return fees of $1,500 and the total sum of fees must fall below 2% of his Adjusted Gross Income.
=(2% x $200,000) = $4,000
=$2,000 + $1,500 = $3,500
Note - The However, because the 2% AGI (2% x $200,000 AGI = $4,000) exceeds the sum of the broker management fees ($2,000) and the tax return fees ($1,500). He won't deduct anything
