Choice "C" is correct. Deductible medical expenses are limited to the amount that exceeds 7.5% of the taxpayer's adjusted gross income. Deductible medical expenses are those expenses that are "necessary" (such as doctors, prescriptions, required surgery, etc.) Non-deductible expenses are such things as elective surgeries, health club memberships and unnecessary medical expenditures. The Andradis' AGI is $65,000; 10% of that is $6,500. Qualified medical expenses are $2,300 for their daughter's prescriptions and $3,000 for physical therapy for their son. Total allowable gross expenditures of $5,300 are less than the threshold of $6,500. So the answer is zero.
Choice "b" is incorrect. The son's physical therapy is also a deductible expenditure, and the $2,300 does not take into account the 10% threshold.
Choice "a" is incorrect. This answer is the threshold, which should then be compared to the qualified expenses in order to figure the amount to be deducted on Schedule A.
Choice "d" is incorrect. This answer is the total deductible medical expenses; however, the answer does not take into account the 10% threshold.