Problem 10-24 (LO. 2) Paul, suffers from emphysema and severe allergies and, upon the recommendation of his physician, has a dust elimination system installed in his personal residence. In connection with the system, Paul incurs and pays the following amounts during 2021: Doctor and hospital bills $4,500 Dust elimination system 10,000 Increase in utility bills due to the system 450 Cost of certified appraisal 300 In addition, Paul pays $750 for prescribed medicines. The system has an estimated useful life of 20 years. The appraisal was to determine the value of Paul's residence with and without the system. The appraisal states that his residence was worth $350,000 before the system was installed and $356,000 after the installation. Paul's AGI for the year was $50,000. a. What is the total of Paul's qualifying medical expenses for 2021? $ b. What is his medical expense deduction for 2021? Problem 13-89 (LO. 8, 9) Missy, age 30, has owned her principal residence (adjusted basis of $225,000) for five years. During the first three years of ownership, she occupied it as her principal residence. During the past two years, she was in graduate school and rented the residence. After graduate school, Missy returned to the same location where she previously worked. At this point, she purchased another residence for $400,000 and listed her old residence for sale at $340,000. Due to a slow real estate market, 11 months later Missy finally receives an offer of $330,000. If an amount is zero, enter "O". a. What is Missy's recognized gain if she immediately accepts the $330,000 offer i.e., 11 months after the listing date)? Selling expenses are $ 20,000. b. What is Missy's recognized gain if she rejects the $330,000 offer and accepts another offer of $340,000 three months later (i.e., 14 months after the listing date)? Selling expenses are $20,000. c. Which offer should Missy accept? (She is in the 24% Federal income tax bracket). Missy should accept the Problem 13-88 (LO. 8, 9) Ramesh owns a beach house (four years) and a cabin in the mountains (six years). His adjusted basis is $300,000 in the beach house and $315,000 in the mountain cabin. Ramesh also rents a townhouse in the city where he is employed. During the year, he occupies each of the three residences as follows: Townhouse 135 days Beach house 155 days Mountain cabin 75 days The beach house is close enough to the city so that he can commute to work during the spring and summer. Although this level of occupancy may vary slightly from year to year, it is representative during the time period that Ramesh has owned the two residences. Because Ramesh plans to retire in several years, he sells both the beach house and the mountain cabin. The mountain cabin is sold on March 3, 2021, for $540,000 (related selling expenses of $35,000). The beach house is sold on December 10, 2021, for $700,000 (related selling expenses of $42,000). a. Calculate Ramesh's least allowable recognized gain on the sale of the two residences. Ramesh's recognized on the sale of the beach house is and his recognized on the sale of the mountain cabin is $ b. Assume instead that both residences satisfy the two-year ownership and use tests as Ramesh's principal residence. Because the mountain cabin is sold first, can Ramesh apply the $ 121 exclusion to the sale of the beach house