. 54. Billy, single and age 42, has the following items of income and expense for the current tax year. Wages: S60,000 Interest: $1,000 Inheritance: $50,000 Alimony paid: $10,000 (2016 divorce decree) Child support paid: $8,000 Federal taxes paid: $5,000 State income taxes paid: $2,000 Medical expenses: $7,500 How much of the medical expenses will he deduct on his Schedule A? a. $0. b. $3,675. c. $3,825. d. $7,500 55. Robin's automobile, which she uses exclusively in her trade or business, was damaged in an accident. The adjusted basis of the automobile prior to the accident was $8,000. The fair market value of the automobile before the accident was $10,000 and the fair market value of the automobile after the accident was $500. Insurance proceeds of $9,500 were received. What are Robin's income tax consequences resulting from this transaction? a. $0. b. $1,500 loss. c. $500 loss. d. $1,500 gain