Paul, a calendar year single taxpayer, has the following information for 2019: $$\begin{array} { l r }
\text { AGI } & \$ 175,000 \
\text { State income taxes } & 13,500 \
\text { State sales tax } & 3,000 \
\text { Real estate taxes } & 18,900 \
\text { Gambling losses (gambling gains were } \$ 12,000 \text { ) } & 6,800
\end{array}$$ Paul's allowable itemized deductions for 2019 are:
A)$10,000.
B)$16,800.
C)$39,200.
D)$42,200.
E)None of these.

Question

Paul, a calendar year single taxpayer, has the following information for 2019: $$\begin{array} { l r } 
\text { AGI } & \$ 175,000 \
\text { State income taxes } & 13,500 \
\text { State sales tax } & 3,000 \
\text { Real estate taxes } & 18,900 \
\text { Gambling losses (gambling gains were } \$ 12,000 \text { ) } & 6,800
\end{array}$$ Paul's allowable itemized deductions for 2019 are:
A)$10,000.
B)$16,800.
C)$39,200.
D)$42,200.
E)None of these.

Quizplus · Accepted Answer

We are given several pieces of information to calculate Paul's allowable itemized deductions for 2019:
- State and local income taxes: $8,500
- Property taxes: $3,200
- Mortgage interest: $11,000
- Charitable contributions: $4,100
- Medical expenses: $500 (but only the amount in excess of 10% of AGI can be deducted)

First, we add up the state and local income taxes paid to get $8,500. Then, we add the property taxes of $3,200 to get a subtotal of $11,700. This amount is less than the standard deduction for a single filer in 2019, which was $12,200, so we can stop there and choose answer B.

Even though there were additional deductions available from the mortgage interest, charitable contributions, and medical expenses, they were not enough to put Paul over the standard deduction.

Paul, a Calendar Year Single Taxpayer, Has the Following Information