During 2013,Mark's employer withheld $2,000 from his wages for state income tax.Mark claimed the $2,000 as an itemized deduction on his 2013 federal income tax return.His total itemized deductions for 2013 were $6,000.Mark's taxable income for 2013 was a negative $20,000 due to substantial business losses.Mark received the $2,000 as a refund from the state during 2014.What amount must Mark include in income in 2014?

Question

Quizplus · Accepted Answer

Since Mark's taxable income was negative in 2013, he did not receive a tax benefit from the state tax deduction. Therefore, the refund is not taxable in 2014.

During 2013,Mark's Employer Withheld $2,000 from His Wages for State