5. Doctor Bones prescribed physical therapy in a pool to treat Jacks broken back. In response to this advice (and for no other reason), Jack built a swimming pool in his backyard and strictly limited use of the pool to physical therapy. Jack paid $25,400 to build the pool, but he wondered if this amount could be deducted as a medical expense. Determine if a capital expenditure such as the cost of a swimming pool qualifies for the medical expense deduction.

Multiple Choice

a. The entire expenditure incurred to build the pool qualifies for medical expense deduction.

b. Only part of the expenditure incurred to build the pool that does not result in any increase in the value of the residence qualifies for medical expense deduction

c. No expenditure incurred to build the pool qualifies for medical expense deduction as it permanently results in increase in value of the residence.

10. Calvin reviewed his canceled checks and receipts this year for charitable contributions. He has owned the IBM stock and painting since 2005.

Donee	Item	Cost		FMV
Hobbs Medical Center	IBM stock	$	5,000	$	22,000
State Museum	Painting		5,000		3,000
A needy family	Food and clothes		400		250
United Way	Cash		8,000		8,000

Calculate Calvin's charitable contribution deduction and carryover (if any) under the following circumstances. (Leave no answer blank. Enter zero if applicable.)

e. Calvins AGI is $100,000 but the painting is worth $10,000.

Charitable contribution deduction?

Carryover?