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. She is an employee and is not self-employed. 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 $700 in reimbursements from their medical plan and report $5,000 of investment income (included in AGI). They contributed stock, with a fair market value of $3,150, which they acquired in 2005 at a cost of $1,800 to Ohlone College. Their gambling winnings for the year were $1,500 and are included in their adjusted gross income. Their adjusted gross income for the year is $101,000 and they provide you with the following data: Automobile insurance 1,450 Homeowners insurance 625 Life insurance 1,200 Disability insurance 475 Health insurance premiums (paid on an after-tax basis) 1,650 Country club dues 1,600 Gym membership 850 Hospital bills 5,100 Doctor bills 1,475 Aroma Therapy 700 Dentist bills 3,710 Prescription medications 285 Over-the-counter medications 470 State taxes withheld 8,350 Property taxes (ad valorem) 500 Investment interest 1,600 Mortgage interest (primary residence) 7,100 Real estate taxes (primary residence) 2,040 Mortgage interest (vacation residence - unallocated) 2,650 Real estate taxes (vacation residence - unallocated) 1,520 Charitable contributions (cash; they have receipts) 7,850 Charitable contribution (clothes at FMV) 200 Subscriptions to investment journals 150adjusted gross income. Their adjusted gross income for the year is $101,000 and they provide you with the follow data: Automobile insurance 1,450 Homeowners insurance 625 Life insurance 1,200 Disability insurance 475 Health insurance premiums (paid on an after-tax basis) 1,650 Country club dues 1,600 Gym membership 850 Hospital bills 5,100 Doctor bills 1,475 Aroma Therapy 700 Dentist bills 3,710 Prescription medications 285 Over-the-counter medications 470 State taxes withheld 8,350 Property taxes (ad valorem) 500 Investment interest 1,600 Mortgage interest (primary residence) 7,100 Real estate taxes (primary residence) 2,040 Mortgage interest (vacation residence - unallocated) 2,650 Real estate taxes (vacation residence - unallocated) 1,520 Charitable contributions (cash; they have receipts) 7,850 Charitable contribution (clothes at FMV) 200 Subscriptions to investment journals 150 Dues to professional organizations 400 Tax prep fees 550 Investment advice 650 Parking at work 250 Safe-deposit box 700Gambling losses O Unreimbursed employee business expenses (the full amounts paid and unreimbursed) Airfare 500 Lodging 450 Meals 290 Entertainment 280 Incidentals 250
