In which of the following situations would a taxpayer be better off to take the foreign taxes paid as an itemized deduction rather than as a foreign tax credit?
A)The foreign tax paid was less than 10% of AGI.
B)The foreign tax paid was to a South American country.
C)The foreign tax paid was a property tax.
D)The foreign tax paid was an income tax.

Question

Quizplus · Accepted Answer

The taxpayer would be better off taking the foreign taxes paid as an itemized deduction rather than as a foreign tax credit when the foreign tax paid was a property tax. This is because the foreign tax credit is generally available for income taxes paid to a foreign country, not for property taxes. Property taxes can be itemized deductions if they are related to personal property, which could provide a greater benefit depending on the taxpayer's overall tax situation.

In Which of the Following Situations Would a Taxpayer Be