Pedro, who is a single taxpayer, had AGI of $369,600 for 2017. He incurred the f

Question

Pedro, who is a single taxpayer, had AGI of $369,600 for 2017. He incurred the following expenses during the year:

Medical expenses before 10%-of-AGI limitation $17,780

State and local income taxes $11,088

Real estate taxes $2,218

Home mortgage interest $18,480

Charitable contributions $4,435

Deductible investment interest expense $1,663

Compute the amount of Pedro's itemized deductions after any applicable reductions and/or limitations. Round your computations to the nearest dollar and use rounded amounts in subsequent calculations.
$

Explanation / Answer

Pedro's itemized deductions :-

Home mortgage interest $18,480

Real estate taxes $2,218

State and local income taxes $11,088

Deductible investment interest expense $1,663

Charitable contributions $4,435

Medical expenses

You can only deduct the amount of medical expenses that exceed 10 percent of your AGI

So,10% of AGI=$369,600*.10

=$36960

So,medical expenses would not be included in Itemized deduction as it is less than 10% of AGI.

So, total itemized deductions would be:-

Home mortgage interest $18,480

Real estate taxes $2,218

State and local income taxes $11,088

Deductible investment interest expense $1,663

Charitable contributions $4,435

Total itemised dedution=$37884

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