Question

Classify each of the following expenditures paid in 2019 as a deduction for AGI, a deduction from AGI, or not deductible: a. Roberto gives cash to his father as a birthday gift. b. Sandra gives cash to her church. c. Albert pays Dr. Dafashy for medical services rendered. d. Mia pays alimony to Bill. e. Rex, who is self-employed, contributes to his pension plan. f. Bonita pays expenses associated with her rental property. g. Lu, who operates a sole proprietorship, takes a client to dinner to discuss new business.

Answer 1

The answers are:

A) Not deductible (birthday gifts are not deductible)

B) Deductible from AGI (donations to church are deductible)

C) Deductible from AGI (medical expenses are deductible)

D) Deductible for AGI (alimony expenses for divorces prior to 2019 are deductible)

E) Deductible for AGI (pension plan contributions are deductible)

F) Deductible for AGI (rental property expenses are deductible)

G) Not deductible (entertainment is not a deductible business expense)