Hugh, a self-employed individual, paid the following amounts during the year: $$\begin{array} { l r }
\text { Real estate tax on Iowa residence } & \$ 3,800 \
\text { State income tax } & 1,700 \
\text { Real estate taxes on a vacation home } & 2,100 \
\text { Gift tax paid on gift to daughter } & 1,200 \
\text { State sales taxes } & 1,750 \
\text { State occupational license fee } & 300 \
\text { Property tax on value of his automobile (used 100\% for business) } & 475
\end{array}$$ What is the maximum amount Hugh can claim as taxes in itemizing deductions from AGI?
A)$7,650
B)$8,850
C)$9,625
D)$10,000
E)None of these

Question

Hugh, a self-employed individual, paid the following amounts during the year: $$\begin{array} { l r } 
\text { Real estate tax on Iowa residence } & \$ 3,800 \
\text { State income tax } & 1,700 \
\text { Real estate taxes on a vacation home } & 2,100 \
\text { Gift tax paid on gift to daughter } & 1,200 \
\text { State sales taxes } & 1,750 \
\text { State occupational license fee } & 300 \
\text { Property tax on value of his automobile (used 100\% for business) } & 475
\end{array}$$ What is the maximum amount Hugh can claim as taxes in itemizing deductions from AGI?
A)$7,650
B)$8,850
C)$9,625
D)$10,000
E)None of these

Quizplus · Accepted Answer

The maximum amount Hugh can claim as taxes in itemizing deductions from AGI is $7,650. This includes the real estate tax on his Iowa residence ($3,800), the state income tax ($1,700), and the property tax on his automobile (used 100% for business) ($475). The real estate taxes on his vacation home ($2,100), the gift tax paid on the gift to his daughter ($1,200), the state sales taxes ($1,750), and the state occupational license fee ($300) are not deductible.

Hugh, a Self-Employed Individual, Paid the Following Amounts During the Year