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Paul suffers from emphysema and severe allergies and, upon the recommendation of his physician, has a dust elimination system installed in his personal residence
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 2019:
| Doctor and hospital bills | $ 2,500 |
| 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. How much of the medical expenses qualify for the medical expense deduction in 2019?
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Expert Solution
PFA
10% of AGI = $ 50,000 * 10%
= $ 5,000
Total medical expenses allowed = Net eligible medical expenses - 10% of AGI
= $ 7,700 - $ 5,000
= $ 2,700
Medical deduction allowed in 2019 = $ 2,700
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