Problem 10-40 (Algorithmic) (LO. 2, 3, 4, 5, 6, 7)
For calendar year 2023, Stuart and Pamela Gibson file a joint return reflecting AGI of $386,300. Their itemized deductions are as follows:
Note: All expenses are before any applicable limitations, unless otherwise noted.
Casualty loss in a Federally declared disaster area (not covered by
insurance; before the 10%-of-AGI limitation but after the $100 floor)
Home mortgage interest (loan qualifies as acquisition indebtedness)
Credit card interest
Property taxes on home
Charitable contributions
State income tax
Tax return preparation fees
$70,000
28,000
1,400
21,000
38,500
24,500
2,100
Round your final answers to the nearest whole dollar.
Calculate the amount of itemized deductions the Gibsons may claim for the year.
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As a general rule, the deduction of personal expenditures is disallowed by § 262 of the Code. However, Congress has chosen to allow certain
personal expenditures to be deducted as itemized deductions. Personal expenditures that are deductible as itemized deductions include medical
expenses, certain taxes, mortgage interest, investment interest, and charitable contributions. Taxpayers can use the greater of itemized
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