Lucy Liu (unmarried) is employed as an office manager at the main office of Layt

Question

Lucy Liu (unmarried) is employed as an office manager at the main office of Layton and Associates CPA firm.  Lucy lives in a home she purchased 20 years ago, at 223 Bluebird Drive, Wingate, NC  28600. Lucy was born on 12/18/1952 and her Social Security # is 335-67-8910.  Lucy’s older cousinLisa Lee (born 11/2/1944, SS# 566-77-8899) lives with Lucy in her home. Lisa is retired and her only source of income is $9,900 of Social Security benefits each year. The value of the housing and food, etc. that Lucy provides to Lisa is $10,500.

Lucy received a W-2 from her employer that showed Box 1 wages $70,000, Box 2 federal tax withheld $9,300, and Box 16 NC state income tax withheld $3,700.

Lucy received $250 in interest from Carolina County (municipal) bonds, $1,120 interest from IBM bonds, and $1,015 interest from her savings account at BB&T.

Lucy received cash dividends of $460 from Proctor & Gamble Corporation and $500 from Duke Energy.  Both dividends are ordinary AND qualified.

Lucy sold 1,000 shares of DM stock for $18 per share on June 15, 2017.  She purchased the stock on December 12, 2009 for $10 a share.  She also sold 1,000 shares of RSA stock for $40 a share on October 2, 2017. She purchased those shares for $65 a share on February 2, 2017.

Lucy paid $5,800 for medical care for herself and Lisa, beyond any insurance reimbursements.

Lucy paid $2,200 mortgage interest on her home, and $2,800 real estate taxes.

Lucy contributed $6,350 to her church during the year.

What are Lucy's itemized deductions?(Calculations please)

Explanation / Answer

Lucy's Itemized deductions 1 Mortgage interest $2,200 2 Real Estate Taxes $2,800 3 Chartiable contribution to Church $6,350 4 Medical Expenses $543 Total itemized deduction $11,893 Adjusted Gross Income Wages $70,000 Interest from IBM bonds $1,120 Interest from Saving account $1,015 Dividend from P&G $460 Dividend from Duke Energy $500 Capital loss adjustment ($3,000) AGI $70,095 7.5% of AGI $5,257 Medical expense allowable deduction $543 ($5800-$5257) Capital gain on DM stock $8,000 Short term capital loss on RSA Stock ($25,000) Net Capital Loss ($17,000) Capital loss offset from other income ($3,000) Capital loss carryforward ($14,000)

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