*All questions are necessary to answer.

1. Clem is married and is a skilled carpenter. Clems wife, Wanda, works part-time as a substitute grade school teacher. Clem paid self-employment tax of $15,000 (the employer portion is $7,500) and Wanda had $4,000 of Social Security taxes withheld from her pay. Determine the amount of Clems expenses that are deductible for AGI this year.

2. Betty operates a beauty salon as a sole proprietorship. Betty also owns and rents an apartment building. This year Betty had the following income and expenses. Determine Bettys AGI. You may assume that Betty will owe $2,502 in self-employment tax on her salon income.

Interest income $ 11,255 Salon sales and revenue 86,360 Salaries paid to beauticians 45,250 Beauty salon supplies 23,400 Alimony paid to her ex-husband, Rocky (2016 divorce) 6,000 Rental revenue from apartment building 32,220 Depreciation on apartment building 12,900 Real estate taxes paid on apartment building 11,100 Real estate taxes paid on personal residence 6,241 Contributions to charity 4,237

3. Lionel is an unmarried law student at State University Law School, a qualified educational institution. This year Lionel borrowed $24,000 from County Bank and paid interest of $1,440. Lionel used the loan proceeds to pay his law school tuition. Calculate the amount Lionel can deduct for interest on higher education loans. Lionels AGI before deducting interest on higher education loans is $76,000.

4. Simpson is a single individual who is employed full-time by Duff Corporation. This year Simpson reports AGI of $51,000 and has incurred the following medical expenses:

Dentist charges $ 900 Physician's charges 1,800 Optical charges 500 Cost of eyeglasses 300 Hospital charges 2,100 Prescription drugs 250 Over-the-counter drugs 450 Medical insurance premiums (not through an exchange) 775

Calculate the amount of medical expenses that will be included with Simpsons itemized deductions after any applicable limitations.

5. Tim is a single, cash-method taxpayer with an AGI of $50,000. In April of this year Tim paid $1,020 with his state income tax return for the previous year. During the year, Tim had $5,400 of state income tax and $18,250 of federal income tax withheld from his salary. In addition, Tim made estimated payments of $1,260 and $1,900 of state and federal income taxes, respectively. Finally, Tim expects to receive a refund of $500 for state income taxes when he files his state tax return for this year in April next year. What is the amount of taxes that Tim can deduct as an itemized deduction?

6. This year Randy paid $29,000 of interest (Randy borrowed $450,000 to buy his residence, and it is currently worth $500,000). Randy also paid $2,500 of interest on his car loan and $4,200 of margin interest to his stockbroker (investment interest expense). Randy received $2,200 of interest this year and no other investment income or expenses. His AGI is $75,000. How much of this interest expense can Randy deduct as an itemized deduction?

*Answer all questions please