Reference no: EM132694003

In 2020?, Casey?, a single taxpayer with no? dependents, was severely hurt in a farm accident. Casey is 38 years old. The accident left Casey?'s legs? 85% paralyzed.

• After incurring $13,000 of medical expenses at the? hospital, the doctor recommended that Casey install a pool at her home for therapy. The pool cost $33,000 to install and increased the value of her home by $29,000. She spent $940 maintaining the pool in 2020 and $1,040 in 2021. Casey also purchased a wheelchair on December? 28, 2020?, for $2,800?, which she charged to her credit card. She paid her credit card bill on January? 6, 2021. She also purchased a hospital bed for $4,100 but did not pay for the bed until 2021. Casey paid her physical therapist $4,500 for services performed in 2021. Casey paid $1,100 in medical insurance premiums on an? after-tax basis in both 2020 and 2021.

• In 2021?, the insurance company reimbursed Casey $10,500 for her hospital stay in 2020. Her AGI for 2020 and 2021 is $43,000 and $51,000?, ?respectively, not considering any of the above items.
• Casey has no other itemized deductions in either year.

Problem a. What is Casey?'s taxable income for 2020??

Problem b. What is Casey?'s medical expense deduction for 2021?? How does she treat the? reimbursement?