David, a calendar year married taxpayer, files a joint return for 2017. Informat

Question

David, a calendar year married taxpayer, files a joint return for 2017. Information for the year includes the following:

AGI (including wagering gains)                                                 $371,800

State income taxes                                                                     15,000

Charitable contributions                                                               16,000

Wagering losses (wagering gains were $22,000)                           20,000

David's allowable itemized deductions for the year are:

$51,000

$29,260

$49,260

$31,000

None of the above.

$51,000

$29,260

$49,260

$31,000

None of the above.

Explanation / Answer

Total of itemized deductions before phase out is = 15000+16000+20000 = 51000

AGI of the taxpayer (371,800) exceeds threshold amount (313,800) by 58,000.

Amount of itemized deductions phase out = 58000*3% = 1,740

Thus, allowable itemized deductions = 51000-1,740 = 49,260

Option - c is correct

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