Felix,a single taxpayer,claimed $180 of state tax as an itemized deduction on his 2016 tax return.The total itemized deductions on his tax return were $6,350.In 2017,he received a $25 refund from the state.What is the amount Felix has to report on his 2017 tax return?

Question

Quizplus · Accepted Answer

Since Felix claimed the $180 state tax as an itemized deduction in 2016, he received a tax benefit from it in that year. Therefore, he must report the $25 state tax refund as income on his 2017 tax return. However, since the refund amount is less than the $180 he claimed in 2016, he does not have to repay any of that deduction. Thus, the amount Felix has to report on his 2017 tax return is $25 (choice D).

Felix,a Single Taxpayer,claimed $180 of State Tax as an Itemized