Nancy paid the following taxes during the year:
Nancy sold her personal residence on June 30 of this year under an agreement in which the real estate taxes were not prorated between the buyer and the seller. What amount qualifies as a deduction from AGI for Nancy?
A)$9,180
B)$9,130
C)$7,382
D)$5,382
E)None of the above

Question

Nancy paid the following taxes during the year: ​
 Nancy sold her personal residence on June 30 of this year under an agreement in which the real estate taxes were not prorated between the buyer and the seller. What amount qualifies as a deduction from AGI for Nancy?
A)$9,180 
B)$9,130 
C)$7,382 
D)$5,382 
E)None of the above

Quizplus · Accepted Answer

According to the information given, Nancy paid $4,500 in state income taxes and $2,500 in real estate taxes. The real estate taxes are only deductible if they were prorated between the buyer and the seller at the time of sale, which was not the case. Therefore, her total itemized deduction for taxes is $4,500 for state income taxes. This amount qualifies as a deduction from AGI. Hence, the correct answer is C.

Nancy Paid the Following Taxes During the Year: ​

Nancy Paid the Following Taxes During the Year: