Wang, a licensed architect employed by Skye Architects, incurred the following unreimbursed expenses this year: Wang's AGI is $75,000. What is his net deduction for miscellaneous itemized deductions?
A)$0
B)$1,900
C)$800
D)$1,500

Question

Wang, a licensed architect employed by Skye Architects, incurred the following unreimbursed expenses this year:  Wang's AGI is $75,000. What is his net deduction for miscellaneous itemized deductions?
A)$0 
B)$1,900 
C)$800 
D)$1,500

Quizplus · Accepted Answer

Miscellaneous itemized deductions are subject to a 2% floor, meaning that only the amount that exceeds 2% of AGI can be deducted. In this case, 2% of Wang's AGI is $1,500, so only the amount of expenses that exceeds that can be deducted. Wang's unreimbursed expenses total $2,300, so his net deduction would be $800 ($2,300 - $1,500). Therefore, the correct answer is C.

Wang, a Licensed Architect Employed by Skye Architects, Incurred the Following