Question

1) To what extent would the following taxes be deductible by Married Couple under § 164?

c) A local property tax of $10,000 for which Married Couple became liable as owners of Blackacre on January 1, but which Buyer agreed to pay half of when Buyer acquired Blackacre from Married Couple on July 1.

d) A Federal income tax of $20,000

e) A state income tax of $7,000, a state sales tax of $1,000, and a local property tax of $2,000.

2) Son, who is single, owns a home. Father pays Son’s $14,000 annual property tax.

(a) May Father deduct the tax paid?

(b) Is the tax deductible by Son?

3. Both state and federal governments impose gasoline taxes on Customer. Are the taxes deductible:

(a) If Customer uses her vehicle only for personal use?

(b) If Customer uses her vehicle only for business use in a business she owns?

(c) If Customer uses her vehicle 30% in her business and 70% for personal use?

Answer 1

Q 1 To what extent would the following taxes be deductible by Married Couple under § 164?

Ans : ( E ) is the correct answer becuase under section 164 laying for property-related taxes

Option D is part of income tax which can paid togather of single single also and option C alos part of property tax but this section not applicable on blacacre property

Q 2 Son, who is single, owns a home. Father pays Son’s $14,000 annual property tax

Ans : (A) There are two possibilities here. First The property is registered in his father's name and Second The son is still under 18. that why second option not applicable

Q 3 Both state and federal governments impose gasoline taxes on Customer. Are the taxes deductible:

Ans : (C) Becuase gasoline tax is an important policy tool to control the externalities associated with automobiles
Use to reduce dependence on oil imports and increase government revenue. Also reduase local air pollution, carbon dioxide emissions, traffic accidents, and traffic congestion.