Scenario ohn and Julia are married and have two children . John works as a graphic designer for a design firm and Juli massage therapist . They own a vacation home in Colorado that is used 309 6 for personal purposes assume it is user as a rental property and the income and expenses related to the rental have been accounted ) . During the year they r $600 in reimbursements from their medical plan and report $5, 500 of investment income ( included in AGI ) contributed stock , with a fair market value of $3 090 , which they acquired in 2005 at a cost of $1 700 to Ohlone Co Their gambling winnings for the year wer a $1 , 100 and are included in their adjusted gross income . Their adjusted income for the year is $98 000 and they provide you with the following data Automobile insurance $ 1 450 Homeowners insurance Life insurance 1090 Disability insurance 375 Health insurance premiums ( paid on an after tax basis ) 1600 Country club dues 1.800 Health club dues Hospital 5000 Doctor 1. 275 Massage Therapists ( they pay to receive messages , not related to Julia's job ) 3. 750 Prescription drugs 275 Over the - counter drugs 160 State taxes withheld 8.475 Property taxes ( ad valorem ) 400 Investment interest 1.600 Mortgage interest ( primary residence ) 5850 Real estate taxes ( primary residence ) 2,240 Mortgage interest ( vacation residence - unallocated ) 2700 Real estate taxes ( vacation residence - unallocated ) 1350 Charitable contributions ( cash they have receipts ) 1750 Charitable contribution ( clothes at FMV ) Subscriptions to investment journals Dues to professional organizations Tax prep fees Investment advice Parking at work 190 Safe deposit box Gambling losses