Mr. Jackson owns a portfolio of stocks. In 2015, he paid $1,500 to a financial a

Question

Mr. Jackson owns a portfolio of stocks.  In 2015, he paid $1,500 to a financial adviser who helped Mr. Jackson select stocks. Mr. Jackson paid $300 for subscriptions to the Wall Street Journal, Business Week and Fortune magazines. He often finds investment ideas in these magazines. He paid $400 to a CPA to prepare his taxes and $100 to rent a safe deposit box at a local bank.

For 2015, Mr. Jackson's adjusted gross income (AGI) is $70,000. Other than the amounts noted above, he has no expenses that would go on lines 21, 22 or 23 of Schedule A.

Using the part of Form 1040 Schedule A reproduced below, determine how much of Mr. Jackson's investment expenses he can deduct as an itemized deduction (line 27). Make sure you work through each line and give the number that would be on line 27.

$900

$600

$2,000

$2,300

$900

$600

$2,000

$2,300

Explanation / Answer

Amount Paid to Financial Adviser $ 1,500.00 Amount paid for Subscription to the Wall Street Journal $     300.00 Amount Paid to CPA to prepare his taxes $     400.00 Rent a safe deposit box at a local bank $     100.00 Total of Miscellaneous Expenses/Investment Expenses $ 2,300.00 Investment Expense be allowed as itemized deduction =(Portion of expense that exceeds 2% of adjusted gross income) 2% of Adjusted gross income=($70000*2%) $ 1,400.00 Investment Expense be allowed as itemized deduction =($2300-$1400)=$900 Ans $900

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