Fred and Lucy Are Married and Together Have AGI of $120,000

Multiple Choice

Fred and Lucy are married and together have AGI of $120,000 in 2012.They have four dependents and file a joint return.They pay $5,000 for a high deductible health insurance policy and contribute $2,600 to a qualified Health Savings Account.During the year, they paid the following amounts for medical care: $9,200 in doctor and dentist bills and hospital expenses, and $3,000 for prescribed medicine and drugs.In October 2012, they received an insurance reimbursement of $4,400 for the hospitalization.They expect to receive an additional reimbursement of $1,000 in January 2013.Determine the maximum deduction allowable for medical expenses in 2012.

A) $1,100.
B) $3,800.
C) $9,200.
D) $12,800.
E) None of the above.