Mitch, who is single and age 66 and has no dependents, had AGI of $100,000 in 20

Question

Mitch, who is single and age 66 and has no dependents, had AGI of $100,000 in 2015. His potential itemized deductions were as follows:
Medical expenses (before percentage limitation) $15,000

State income taxes 3,000

Real estate taxes 7,000

Mortgage (qualified housing and residence) interest 9,000

Cash contributions to various charities 4,000

Unreimbursed employee expenses (before percentage limitation) 4,300

What is the amount of Mitch’s AMT adjustment for itemized deductions for 2015?

a. $14,800

b. $16,800

c. $19,300

d. $25,800

e. None of the above

Please provide calculation & explanation

Explanation / Answer

Notes:

1. state tax, real estate tax are not allowed so (3000+7000) =10000 adjustment

2. medical expenses upto 10% of AGI is allowed whereas the regular deduction is 7.5%

so unfavorable adjustment = (10%-7.5%)*100000 = 2500

3. miscellanoeous deduction = 4300 - (2%*100000) = 2300

so total adjustment = 10000+2500+2300 = 14800

so option a is correct

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