Question

In: Accounting

1. During the current year, Mr. and Mrs. West paid the following taxes: Property taxes on...

1. During the current year, Mr. and Mrs. West paid the following taxes:

Property taxes on residence $1,900

Special assessment for installation of a sewer system in their neighborhood $1,000

State personal property tax on their automobile (based on value) $400

Property taxes on land held for long-term appreciation $600

What amount can the Wests deduct as property taxes in calculating itemized deductions for the current year?

a. $2,900

b. $2,300

c. $1,900

d. $0

e. None of these choices are correct.

2. During the current year, Mr. and Mrs. West paid the following taxes:

Property taxes on residence $1,900

Special assessment for installation of a sewer system in their neighborhood $1,000

State personal property tax on their automobile (based on value) $400

Property taxes on land held for long-term appreciation $600

What amount can the Wests deduct as property taxes in calculating itemized deductions for the current year?

a. $2,900

b. $2,300

c. $1,900

d. $0

e. None of these choices are correct.

3. During the current year, Mr. and Mrs. West paid the following taxes:

Property taxes on residence $1,900

Special assessment for installation of a sewer system in their neighborhood $1,000

State personal property tax on their automobile (based on value) $400

Property taxes on land held for long-term appreciation $600

What amount can the Wests deduct as property taxes in calculating itemized deductions for the current year?

a. $2,900

b. $2,300

c. $1,900

d. $0

e. None of these choices are correct.

4. Margo has $2,200 withheld from her wages for state income taxes during 2018. In March of 2018, she paid $400 in

additional taxes for her 2017 state tax return. Her state income tax liability for 2018 is $2,700 and she pays the

additional $500 when she files her 2018 state tax return in April of 2019. What amount should Margo deduct as an

itemized deduction for state income taxes on her 2018 federal income tax return, assuming she deducts state and local

income taxes?

a. $2,600

b. $3,100

c. $2,500

d. $2,100

e. None of these choices are correct.

5. During the current year, George, a salaried taxpayer, paid the following taxes which were not incurred in connection

with a trade or business:

Federal income tax (withheld by employer) $1,500

State income tax (withheld by employer) $1,100

FICA tax (withheld by employer) $700

Real property taxes $300

Federal auto gasoline taxes $200

Federal excise tax on telephone bills $50

What amount can George claim for the current year as an itemized deduction for the taxes paid, assuming he deducts

state and local income taxes?

a. $1,150

b. $1,400

c. $2,000

d. $1,100

e. None of these choices are correct.

6. Jerry and Ann paid the following amounts during the current year:

Interest on automobile loan $1,500

Interest on bank loan (proceeds were used to purchase municipal bonds) $5,000

Qualified home mortgage interest $3,150

What is the maximum amount they can use as interest expense in calculating itemized deductions for the current year?

a. $4,650

b. $8,150

c. $6,500

d. $3,150

e. None of these choices are correct.

Solutions

Expert Solution

1. Option A ( $2900)

Calculation of itemized deductions:-

Property taxes on residence = $1900

State personal property tax on their automobile = $400

Property taxes on land held for long term appreciation = $600

Total itemized deductions = $1900 + $400 + $600 = $2900

2. Option A ( $2900)

Calculation of itemized deductions:-

Property taxes on residence = $1900

State personal property tax on their automobile = $400

Property taxes on land held for long term appreciation = $600

Total itemized deductions = $1900 + $400 + $600 = $2900.

3. Option A ( $2900)

Calculation of itemized deductions:-

Property taxes on residence = $1900

State personal property tax on their automobile = $400

Property taxes on land held for long term appreciation = $600

Total itemized deductions = $1900 + $400 + $600 = $2900

4. Option A ($2600)

Calculation of itemized deductions:-

State income taxes withheld from wages = $2200

Additional taxes paid for state tax return of 2014 = $400

Total itemized deductions = $2200 + $400 = $2600

5. Option B ($1400)

As George deducts state and local taxes the following will be deducted,

Calculation of deductions:-

State income tax ( Withheld by employer) = $1100

Real property taxes = $300

Total Deductions = $1400

6. Option D ($3150)

Qualified home mortgage interest is deductible in calculating itemized deductions as an interest expense.

ekkarill92 answered 2 years ago
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