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6 October, 13:06

Federal income tax $15,000State income tax $8,500 Real estate taxes on land in South America (held as an investment) $1,000 State sales taxes 300 Personal property taxes based upon value $1,600 Federal self-employment tax $ 800 What amount can Seth claim as an itemized deduction for taxes paid during the current year?

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  1. 6 October, 15:58
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    total cap for itemized tax deduction = $10,000

    Explanation:

    given data

    Federal income tax = $15,000

    State income tax = $8,500

    Real estate taxes = $1,000

    State sales taxes = 300

    Personal property taxes = $1,600

    Federal self-employment tax = $800

    solution

    as here all mentioned item is only for state federal paid tax and property tax so that is consider for the itemized deduction.

    you are either claim income or the sales tax but not both.

    also cap for tax deduction is capped for $10,000.

    so

    we consider income tax and here higher than the sales tax and property tax

    so here deductible amount will be

    deductible amount = $15000 + $8500 + $1600

    deductible amount = $25,100

    but

    total cap for itemized tax deduction = $10,000
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