Question

Simon lost $6,900 gambling this year on a trip to Las Vegas. In addition, he paid $2,340 to his broker for managing his $234,000 portfolio and $1,485 to his accountant for preparing his tax return. In addition, Simon incurred $3,200 in transportation costs commuting back and forth from his home to his employer's office, which were not reimbursed. Calculate the amount of these expenses that Simon is able to deduct (assuming he itemizes his deductions).

Answer 1

Simon can potentially deduct the broker and accountant expenses, presuming they exceed 2% of his AGI, but not the gambling losses or commuting costs.

Step-by-step explanation:

The question pertains to determining which expenses Simon can deduct for tax purposes. Considering the information provided, it looks like this involves itemizing individual expenses. Here’s how one can approach this, although specific tax laws and eligibility for deductions may vary:

• The $6,900 lost gambling cannot be deducted unless Simon reports equal or greater gambling winnings.
• Broker fees of $2,340 associated with managing investments can be considered for itemized deductions if they exceed 2% of the adjusted gross income (AGI).
• The fee of $1,485 paid to the accountant for tax preparation is also potentially deductible, once again if it and other miscellaneous expenses exceed 2% of the AGI.
• Standard commuting costs, like Simon's $3,200 for work travel, are generally not deductible.

Ultimately, Simon can likely deduct the costs for his broker and accountant, assuming they surpass 2% of his AGI, but cannot deduct his gambling losses or commuting expenses.