Phyllis,a calendar year cash basis taxpayer who itemized deductions totaling $20,000,overpaid her 2015 state income tax and is entitled to a refund of $400 in 2016.Phyllis chooses to apply the $400 overpayment toward her state income taxes for 2016.She is required to recognize that amount as income in 2016.

Question

Quizplus · Accepted Answer

The overpayment of state income tax is considered income in the year it is refunded.

Phyllis,a Calendar Year Cash Basis Taxpayer Who Itemized Deductions Totaling