Ricardo pays the following taxes during the year:
$\begin{array}{lr}
\text { Real estate taxes on his personal residence } & \$ 2,500 \
\text { Real estate taxes on rental property } & 2,000 \
\text { State sales taxes } & 600 \
\text { State income taxes } & 4,000 \
\text { City income taxes } & 1,000 \
\text { Federal income taxes } & 5,400
\end{array}$
What is the amount Ricardo can deduct for taxes as an itemized deduction for the year?

Question

Quizplus · Accepted Answer

Real estate taxes on personal residence and rental property are deductible as itemized deductions. State and local income taxes are also deductible, but federal income taxes are not. Therefore, Ricardo can deduct $2,500 + $2,000 + $600 + $4,000 + $1,000 = $10,100 in taxes. However, the maximum deduction for state and local taxes is $10,000, so Ricardo's total deduction is limited to $10,000.

Ricardo Pays the Following Taxes During the Year What Is the Amount Ricardo Can Deduct for Taxes as Real