Itemized Deductions: Schedule A 

Scenario

John and Julia are married and have two children.John works as a graphic designer for a design firm and Julia is a massage therapist.They own a vacation home in Colorado that is used 30% for personal purposes (assume it is used 70% as a rental property and the income and expenses related to the rental have been accounted). During the year they receive $600 in reimbursements from their medical plan and report $5,500 of investment income (included in AGI).They contributed stock, with a fair market value of $3,000, which they acquired in 2005 at a cost of $1,700 to Ohlone College.Their gambling winnings for the year were $1,000 and are included in their adjusted gross income.Their adjusted gross income for the year is $98,000 and they provide you with the following data:

Automobile insurance$1,450

Homeowners insurance625

Life insurance1,000

Disability insurance 375

Health insurance premiums(paid on an after-tax basis)1,600

Country club dues1,800

Health club dues750

Hospital5,000

Doctor1,275

Massage Therapists700

Dentists3,750

Prescription drugs275

Over-the-counter drugs460

State taxes withheld 3,475

Property taxes (ad valorem)400

Investment interest1,600

Mortgage interest (primary residence) 6,850

Real estate taxes (primary residence)2,240

Mortgage interest (vacation residence - unallocated)2,700

Real estate taxes (vacation residence - unallocated)1,350

Charitable contributions (cash; they have receipts)7,750

Charitable contribution (clothes at FMV)100

Subscriptions to investment journals175

Dues to professional organizations375

Tax prep fees600

Investment advice525

Parking at work190

Safe-deposit box75

Gambling losses650

Massage table500

Unreimbursed employee business expenses (the full amounts paid and unreimbursed)

Airfare500

Lodging450

Meals290

Entertainment280

Incidentals