Solution:
Gross income : 262000
a) Ordinary and necessary business expenses
amount explanation
108850 Ordinary expenses associated with Jeremyâs
business (42250+47700+18900)
b) Unreimbursed employment expenses
amount explanation
- Un reimbursed employee business expenses
are deductible from AGI not for AGI
c) Real property taxes and investment expenses.
amount explanation
- Taxes and investment expenses
are deductible from AGI not for AGI
d) Rental expenses
amount explanation
8590 Rental expenses are deductible for
AGI even though they aretechnically investment or
production of income expenses.
e) Self-employed health insurance
amount explanation
4590 Jeremy may deduct all the costs of his
health insurance because he is not eligible
for health plan
f) Self- employment taxes
amount explanation
1295 ½ of self-employment taxes allowed
as for AGI deduction
g) Alimony
amount explanation
5180 Alimony is allowed for AGI deductions
h) Donations
amount explanation
- Charitable contributions are from
not for AGI deductions
Total for AGI deductions Amount
128505
AGI 135495
