A friend who knows you are taking taxation class wants to know if she can deduct some expenses. Her adjusted gross income for 2012 was $58,000. Pick one of the expenses below and fully explain the proper tax treatment
1. Contributions of 50 hours of service to a qualified charitable organization. The estimated value of service is $1,000. In addition, she drove 200 miles to perform the services.
2. Medical expenses for breast argumentation. Her out-of-pocket expenses was $7,000.
3. Short term capital loss of $4,000.
4. Interest paid on car note of $3,126 and interest paid on student loan $975.20.
5. Unreimbursed employee travel expenses of $2,980.
6. Gambling winnings of $1,820 and losses of $4,150.
7. Contributions of cash and checks of $1,800 as well as household items worth $750 to a local women's shelter. The shelter is a 501c3 organization.
8. Home mortgage interest of $5,978 and real estate taxes of $2,540 were paid on her personal residence.
Fair Isaac Corporation (FICO) score was created to determine the credit worthiness of individuals. What is the connection between a FICO score and interest rate? Do you feel there is too heavy a reliance on FICO scores in determining the credit worthiness of individuals? Please explain your position.