Deductions Mrs. Toby (age 40) is an administrative assistant; her husband and she are cash-basis taxpayers. Mr. Toby, who died on July 1, Year 3, had been permanently disabled on his job and collected state disability benefits until his death. Mr. and Mrs. Toby received the following in Year 3: Earned income State disability benefits Interest on: $50,000 1,500 Refund from amended tax return 50 Savings account and certificates of deposit 350 Municipal bonds 100 Pension benefits 900 Life insurance proceeds 5,000 Mrs. Toby received the pension distributions from a qualified pension plan, paid for exclusively by her husband's employer. Mrs. Toby was the beneficiary of the life insurance policy on her husband's life. She received a lump-sum distribution. The Tobys had paid $500 in premiums. During Year 3, the following payments were made or losses were incurred. For each of the items below, select the appropriate tax treatment using the tax year 2021 rates and rules. A tax treatment may be selected once, more than once, or not at all. 1. Premiums on Mr. Toby's personal life insurance policy ONot deductible 2. Penalty on Mrs. Toby's early withdrawal Choose an option below of funds from a certificate of deposit 3. Mrs. Toby's substantiated cash donation to the American Red Cross 4. Payment of estimated state income taxes 5. Payment of real estate taxes on the Toby home 6. Loss on the sale of the family car 7. Cost in excess of the increase in value of residence, for the installation of a stair ODeductible in Schedule A, Itemized Deductions, subject to threshold of 7.5% of adjusted gross income ODeductible on Form 1040 to arrive at adjusted gross income ODeductible in full in Schedule A, Itemized Deductions, but subject to a $10,000 limitation ODeductible in Schedule A, Itemized Deductions, subject to limitation of 60% (100% in 2020 and 2021) of adjusted gross income lift in January of Year 3, related directly to RESET the medical care of Mr. Toby prior to his death CANCEL ACCEPT