(solution) Case: Last year, Mr. Smith was involved in an automobile

(solution) Case: Last year, Mr. Smith was involved in an automobile

Case:

Last year, Mr. Smith was involved in an automobile accident, severely injuring his legs. As a part of a long-term rehabilitation process, his physician prescribes a daily routine of swimming. Because there is not readily available public facility nearby, Mr. Smith purchases a house with a pool for $175,000. Replacing the pool would cost $20,000. The existing pool increases the fair market value of the house by $8,000. Mr. Smith spends $500 maintaining the pool and $1,800 in other medical expenses. Mr. Smith wants to know the total amount of medical expenses that he may claim in the current year. His AGI is $60,00

Medical expenses are the expenses that are deducted from the AGI (Adjusted Gross Income) and can
only be deducted 10% of the AGI cap floor rate. We can only deduct the medical expenses if we…