Shoshana paid the following taxes this year: Real estate taxes on rental propert

Question

Shoshana paid the following taxes this year:

Real estate taxes on rental property she owns

$5,000

Real estate taxes on her own residence

4,400

Federal income taxes

10,000

State income taxes

3,750

Local city income taxes

400

What amount can Shoshana deduct as an itemized deduction on his tax return?

A) $5,000

B) $7,500

C) $8,150

D) $9,400

Real estate taxes on rental property she owns

$5,000

Real estate taxes on her own residence

4,400

Federal income taxes

10,000

State income taxes

3,750

Local city income taxes

400

Explanation / Answer

Answer

C. $8150

If you itemize deductions, you can deduct state and local taxes you paid during the year. These taxes can include state and local income taxes or state and local sales taxes, but not both.

Particulars Allowed or not allowed Amount$ Real estate taxes on rental property Not allowed $0 Real estate taxes on his own residence allowed $4400 Federal income taxes Not allowed $0 State income taxes allowed $3750 Local city income taxes Not allowed $0 Total Deduction $8150

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