Christopher Scott is a self-employed computer consultant. He earned a net profit

Question

Christopher Scott is a self-employed computer consultant. He earned a net profit of $100,000 in 2017 from his business. During 2017, he paid $2,500 for health insurance coverage for himself and his wife. What is the amount and character of the deduction that the Scotts may claim on their 2017 individual tax return?

A. $1,750 deduction from gross income to arrive at adjusted gross income and $750 itemized deduction subject to the medical expense limitations.

B. $2,500 itemized deduction subject to the 2%-of-AGI floor for miscellaneous itemized deductions.

C. $2,500 deduction to arrive at adjusted gross income.

D. $1,750 itemized deduction not subject to the 2%-of-AGI floor for miscellaneous itemized deductions and $750 itemized deduction subject to the medical expense limitations.

Explanation / Answer

B. $2,500 itemized deduction subject to the 2%-of-AGI floor for miscellaneous itemized deductions.

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