Blake and Gwen (ages 45 and 51) are married, file a joint return, and have two dependent children ages 11 and 4 that live with them. They also have two pet dogs that live with them; an adult dog and a puppy. Blake works in an office as a Regional Sales Manager of a large corporation, while Gwen owns a business as a sole proprietor. Gwen's business net income for 2023 is $50,000. Neither Blake nor Gwen is an active participant in a qualified retirement plan. During 2023, they received the following cash receipts:

Blake's salary and sales commisions $ 138,000

Loan received from Blake's brother-in-law 6,000

Child support payments received from Gwen's first spouse for the oldest child 7,000

Gambling winnings from trips to race tracks and casinos 8,000

Sale of a personal automobile on 2/1/2023 (originally purchased on 7/1/2020 for $21,500) 9,000

Sale of ABC stock on 3/1/2023 (originally purchased on 5/1/2020 for $9,000) 10,000

Sale of DEF stock on 9/1/2023 (originally purchased on 11/1/2021 for $16,000) 11,000

Interest from a state of Pennsylvania bond 12,000

Interest from investments in corporate bonds 13,000

Unemployment compensation, received for 9 weeks while the union was on strike 14,000

Inheritance from Gwen's deceased uncle 15,000

In addition, Blake and Gwen paid the following during 2023:

Payments made to a contractor to redo the kitchen in the home 24,600

Qualified medical expenses 22,600

Property taxes on personal residence 4,600

Total sales taxes 5,600

State and local income taxes 6,600

Purchase of new personal automobile 25,600

Interest on personal automobile loan 7,600

Interest on loan used to purchase investment property 8,600

Mortgage loan interest on primary residence (outstanding principal = $300,000) 9,600

Cost of hotel accommodations for gambling trips to Atlantic City 1,600

Gambling losses 14,600

Child support paid to Blake's first spouse, whom he divorced on 7/4/2015 16,600

Alimony paid to Blake's first spouse, whom he divorced on 7/4/2015 19,600

Contributions to a traditional IRA (individual retirement account) 5,400

Payment to a breeder to purchase the puppy 400

Gwen made a donation of LTCG property to a qualified private nonoperating foundation: FMV = 50,000

Blake and Gwen had a personal casualty loss--not covered by insurance--in a federally declared

disaster area (amount determined after subtracting $100 floor) 23,000

Using the facts in the previous question , plus using the AGI computed in the previous question, compute Blake and Gwen's total of allowed Itemized Deductions for 2023. Using good form, show which items, and how much of each item, are deductible. Show all calculations using good form.

Blake and Gwen's AGI for 2023 is $231,800.

Included in Gross Income

Blake's Salary: $138,000 Gwen's Business Income: $50,000 Child Support: $7,000 Gambling Winnings: $8,000 Stock Gains: ABC stock: $10,000 - $9,000 = $1,000 DEF stock: $11,000 - $16,000 = ($5,000) loss State Bond Interest: $12,000 Corporate Bond Interest: $13,000 Unemployment Compensation: $14,000 Inheritance: $15,000

Deducted 'For' AGI

Traditional IRA Contribution: $5,400 (Lesser of their contribution or the maximum allowed) AGI

Gross Income: $253,000

For AGI: -$5,400 AGI before Losses: $247,600 Losses:

Capital Loss: The $5,000 loss offset the $1,000 gain from the ABC stock sale. A maximum of $3,000 in net capital losses can be deducted. So $3,000 is deducted from AGI. Casualty Loss:10% of AGI : $24,760 leftover Casualty Loss: $23,000 - $24,760 - $100 = ($1,860). (not deductible) AGI

AGI : $247,600 Capital Loss: -$3,000 AGI: $244,600