Hannah Ferguson is a board$-$certified doctor of anesthesiology. She provides anesthesiology services at several hospitals and surgical centers in the greater Omaha area. Hannah is well$-$respected by the surgeons with whom she works. She uses her home as her business address. She keeps her records there, dictates notes to patient files, participates in conference calls regarding upcoming surgeries and postoperative surgical care, answers work$-$related phone calls, and compiles and sends patient bills. Because Hannah does not maintain a specific area for exclusive business use, she does not claim a tax deduction for a home office. Hannah$$s receipts from her practice during $2022$ were $$185,000,$ $$16,000$ of which was for services performed in $2021.$ Not included in these amounts is $$17,500$ she received in January $2023$ for services rendered in December $2022.$ Hannah$$s professional activity code is $621111.$

Hannah had the following business expenses in $2022$:

Medical clothing $($e$.$g$.,$ lab coats, surgical scrubs$)$ $$2,200$

Medical malpractice insurance $9,500$

State medical license fee $450$

Dues to professional organizations $350$

Subscriptions to professional journals $340$

In addition, she drove the family Suburban $($purchased on March $2,2021)2,900$ miles in connection with her work. She uses the standard mileage method for computing deductible vehicle costs. Total mileage for the Suburban is $9,000$ miles for the year. Both business and total mileage occurred ratably throughout the year.

Gunnar$$s widowed mother, Astrid, endured a few different medical challenges in late $2021.$ On December $30,2021,$ she suffered a massive stroke and died in the hospital on January $16,2022.$ Some of Astrid$$s medical expenses were covered by Medicare, with the remainder being paid by the Fergusons. On February $18,2022,$ Gunnar paid $$39,800$ to the hospital, $$28,000$ of which was attributable to expenses incurred in $2021.$ At the same time, Gunnar also paid the funeral expenses of $$16,000.$ Although Astrid lived in her own home prior to the stroke, Gunnar and Hannah have properly claimed her as a dependent for the past few years.

As Astrid$$s sole heir, Gunnar inherited her home and its furnishings $($located at $5422$ Turnbury Court, Carson, IA $51525).$ The costs and values involved are as follows:

Cost Basis FMV on $1/16/22$

Lot $$10,000$ $$30,000$

House $110,000250,000$

Furnishings $55,00025,000$

Because the home was located in an attractive rental area, Gunnar decided not to sell. Instead, he rented the property fully furnished on May $1,2022.$ The terms of the lease $($executed on April $30)$ provide for the following: one$-$year lease at $$2,500$ per month $($payable on the first of each month$),$ last month$$s rent payable in advance, and damage deposit of $$1,500.$ In total, Gunnar received $$24,000$ from the tenants in $2022$ for their use of the property. Besides depreciation, his expenses were as follows:

Property taxes $$4,800$

Insurance $3,900$

Repairs $2,100$

Tenant locator service $400$

For MACRS depreciation purposes, Gunnar plans to use the straight$-$line method with the mid$-$month convention to compute the deduction for the realty and the $200\%-$declining$-$balance method with a half$-$year convention for the personalty.