43. Han is a self-employed carpenter and his wife, Christine, works full-time as a grade...
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43. Han is a self-employed carpenter and his wife, Christine, works full-time as a grade school teacher. Han paid $525 for carpentry tools and supplies, and Christine paid $3,600 as her share of health insurance premiums (not with pre-tax dollars) for Han and herself in a qualified plan provided by the school district (not through an exchange). Which of the following is a true statement?
A. Both expenditures are deductible for AGI.
B. The tools and supplies are an itemized deduction but the health insurance is deductible for AGI.
C. Neither of the expenditures is deductible.
D. The tools and supplies are deductible for AGI while the health insurance is an itemized deduction.
E. Both expenditures are itemized deductions.
45. Pam recently was sickened by eating spoiled peanut butter. She successfully sued the manufacturer for her medical bills ($3,700), her emotional distress ($6,000 she now fears peanut butter), and punitive damages ($44,000). What amount must Pam include in her gross income?
A. $44,000
B. $50,000
C. $47,700
D. $9,700
E. Zero - none of the benefits are included in gross income.
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