Opal Deducted $2,400 of State Income Taxes on Her Tax

Opal deducted $2,400 of state income taxes on her tax return last year. This year she received a state income tax refund of $170. What amount of the refund, if any, should Opal include in her gross income if last year her total itemized deductions exceeded the standard deduction by $350?

A) $2,050
B) $350
C) $180
D) $170
E) None of the above - refunds of state income taxes are not included in gross incomE.Refund amounts are included in gross income only to the extent that the original deduction provided a tax benefit.The $2,400 of deduction produced a tax benefit of $350 so the entire $170 is included in income.