During the current year, Seth, a self-employed individual, paid the following taxes: $$\begin{array} { l r }
\text { Federal income tax } & \$ 15,000 \
\text { State income tax } & \$ 8,500 \
\text { Real estate taxes on land in South America (held as an investment) } & \$ 1,000 \
\text { State sal es taxes } & 300 \
\text { Personal property taxes based upon value } & \$ 1,600 \
\text { Federal self-employment tax } & \$ 800
\end{array}$$ What amount can Seth claim as an itemized deduction for taxes paid during the current year?
A)$10,100
B)$11,400
C)$9,500
D)$10,000
E)None of these

Question

During the current year, Seth, a self-employed individual, paid the following taxes: $$\begin{array} { l r } 
\text { Federal income tax } & \$ 15,000 \
\text { State income tax } & \$ 8,500 \
\text { Real estate taxes on land in South America (held as an investment) } & \$ 1,000 \
\text { State sal es taxes } & 300 \
\text { Personal property taxes based upon value } & \$ 1,600 \
\text { Federal self-employment tax } & \$ 800
\end{array}$$ What amount can Seth claim as an itemized deduction for taxes paid during the current year?
A)$10,100
B)$11,400
C)$9,500
D)$10,000
E)None of these

Quizplus · Accepted Answer

The only taxes that can be claimed as an itemized deduction on Schedule A are state and local income or sales taxes, real estate taxes, and personal property taxes. Seth paid $8,000 in state income taxes and $2,000 in property taxes, totaling $10,000. Therefore, Seth can claim $10,000 as an itemized deduction for taxes paid during the current year.

During the Current Year, Seth, a Self-Employed Individual, Paid the Following