Frank is a resident of a state that imposes a tax on income. The following information pertaining to Frank's state income taxes is available: $\begin{array}{lr}
\text { State income taxes withheld in } 2019 & \$ 3,500 \
\text { Refund of } 2018 \text { tax received in } 2019 & \$ 400 \
\text { Deficiency assessed and paid in } 2019 \text { for } 2017: & \
\text { State tax } & \$ 600 \
\text { Interest } & \$ 100
\end{array}$
What amount should Frank use as state and local income taxes in calculating itemized deductions for his 2019 Federal tax return, assuming he deducts state and local income taxes?
A)$3,500
B)$3,700
C)$4,100
D)$4,200
E)None of these

Question

Frank is a resident of a state that imposes a tax on income. The following information pertaining to Frank's state income taxes is available: $\begin{array}{lr}
\text { State income taxes withheld in } 2019 & \$ 3,500 \
\text { Refund of } 2018 \text { tax received in } 2019 & \$ 400 \
\text { Deficiency assessed and paid in } 2019 \text { for } 2017: & \
\text { State tax } & \$ 600 \
\text { Interest } & \$ 100
\end{array}$
 What amount should Frank use as state and local income taxes in calculating itemized deductions for his 2019 Federal tax return, assuming he deducts state and local income taxes?
A)$3,500
B)$3,700
C)$4,100
D)$4,200
E)None of these

Quizplus · Accepted Answer

Frank can deduct the state income taxes withheld in 2019 ($3,500) and the deficiency assessed and paid in 2019 for 2017 ($600), totaling $4,100. The refund from 2018 does not affect the 2019 deduction, and interest is not deductible.

Frank Is a Resident of a State That Imposes a Tax