2.       Shauna Coleman is single.She works as an architectural designer for Streamline Design(SD).For 2018, she correctly calculated her AGI tobe $107,000. However, she wasn’t sure how to compute the rest ofher taxable income. She provided the following information withhopes that you could use it to determine her 2018 federal incometax return.

a.          Shauna paid $4,680 for medical expenses for care from a brokenankle sustained in a biking accident. Blake, Shauna’s boyfriend,drove Shauna (in her car) a total of 115 miles so that she couldreceive care for the broken ankle.

b.          Shaunapaid a total of $3,400 in health insurance premiums during the year(not through an exchange). SD did not reimburse any of thisexpense. Besides the health insurance premiums and the medicalexpenses for her broken ankle, Shauna had Lasik eye surgery lastyear and she paid $3,000 for the surgery (she received no insurancereimbursement). She also incurred $450 of other medical expensesfor the year.

c.           SDwithheld $1,800 of state income tax, $7,495 of Social Security tax,and $14,500 of federal income tax from Shauna’s paychecksthroughout the year.

d.          In 2018,Shauna was due a refund of $250 for overpaying her 2017 statetaxes. On her 2017 state tax return that she filed in April of2018, she applied the overpayment towards her 2018 state taxliability. She wasn’t sure but she estimated that her state taxliability for 2018 will be $2,300.

e.          Shauna paid $3,200 of property taxes on her personal residence. Shealso paid $500 to the developer of her subdivision, because he hadto replace the sidewalk in certain areas of the subdivision.

f.           Shauna paid a $200 property tax based on the state’s estimate ofthe value of her car.

g.          Shauna has a home mortgage loan in the amount of $220,000 that shesecured when she purchased the home. The home is worth about$400,000. Shauna paid interest of $12,300 in interest on the loanthis year.

h.          Shaunamade several charitable contributions throughout the year. Shecontributed stock in ZYX Corp. to the Red Cross. On the date of thecontribution, the FMV of the donated shares was $1,000 and herbasis in the shares was $400. Shauna originally bought the ZYXCorp. stock in 2008. Shauna also contributed $300 cash to StateUniversity and religious artifacts she has held for several yearsto her church. The artifacts were valued at $500 and Shauna’s basisin the items was $300. Shauna had every reason to believe thechurch would keep them on display indefinitely. Shauna also drove200 miles doing church-related errands

i            Shauna paid $250 in investment advisory fees and another $150 tohave her tax return prepared (that is, she paid $150 in 2018 tohave her 2017 tax return prepared).

j.           Shauna is involved in horse racing as a hobby. During the year, shewon $2,500 in prize money (which she is including in income) andincurred $10,000 in expenses. She has never had a profitable yearwith her horse racing activities, so she acknowledges that this isa hobby for federal income tax purposes.

k.             Shauna sustained $2,000 in gambling losses over theyear (mostly horse-racing bets) and   only had $200 inwinnings (which she is including in income)

Required: Determine Shauna’s2018 taxable income starting with Adjusted Gross Income of $107,000reported on line 7 of Form 1040 and complete page 2 of Form 1040through Taxable Income, line 10. Also complete Schedule A, ItemizedDeductions.