• Bernie and Linda (20 points)

Bernie and Linda are a married couple who file a joint income tax return for the 2016 tax year. They anticipate an AGI of $400,000 for 2016. Their anticipated itemized deductions are as follows:

Home mortgage interest	$17,300
State income taxes	$8,200
Property taxes	$7,400
Charitable contributions	$5,000
Unreimbursed employee business expenses	$4,100
Investment advisor fees	$2,900

Bernie and Linda tend to be charitably inclined, but Bernie recently read an article about the Pease limitation, and has decided that it doesnt make sense to make further charitable contributions during the year, as their itemized deductions are subject to the phase-out.

• Discuss Bernies argument about not increasing the charitable contributions because they are subject to a phaseout. Is he correct, and why?

• What is the amount of itemized deductions deductible on Schedule A?

• Assume they decide to increase the charitable contributions to $15,000. What is the amount of itemized deductions deductible on Schedule A?

• Is this the result you expected?