How to calculate Schedule A Line 5 base based on the following data? How did the author arrive at 11200 for Line 5?
The Marshalls had the following expenditures for 2016:
Debra’s contribution to her traditional IRA – $5,500
Net gambling loss – $1,000
Life Insurance Premiums $2,700
Medical and dental expenses not covered by insurance $6,200
Taxes:
Ad valorem taxes on personal residence $4,800
State and local sales taxes from receipts $3,200 $8,000
Interest on home mortgage $4,000
Cash contributions:
Goodwill (Sioux Falls branch) $1,200
South Dakota governor’s election campaign fund $300 $1,500
The $1,000 net gambling loss for 2016 is the difference between the Marshall’s gambling winnings of $1,200 and losses of $2,200. The life insurance premiums relate to the universal life insurance policies that Steven and Debra own. The first beneficiary on both policies is the other spouse, with the second beneficiaries being the children. Included in the medical expenses are $1,200 incurred in 2015, which were paid in early February 2016. The Marshalls can substantiate the $3,200 in sales taxes paid based on their purchase receipts for the year. The local sales tax rate in Sioux Falls is 2%. (HINT: Check to see if the Optional Sales Tax Tables provide the Marshalls with a greater deduction.). Debra contributed to the governor’s campaign fund because she thinks his influence was key in getting the Lincoln County land rezoned for commercial use (see item 6 above).
