Ronald pays the following taxes during the year:
$\begin{array}{lr}
\text { Real estate taxes on his personal residence } & \$ 2,500 \
\text { Real estate taxes on rental property } & 2,000 \
\text { State sales taxes (from Federal Sales tax table) } & 1,400 \
\text { State income taxes } & 1,000 \
\text { Federal income taxes } & 5,400
\end{array}$
What is the amount Ronald can deduct for taxes as an itemized deduction for the year?

Question

Quizplus · Accepted Answer

To determine the amount Ronald can deduct for taxes as an itemized deduction for the year, we simply add up all the taxes listed:
$2,500 + $2,000 + $1,400 + $1,000 + $5,400 = $12,300
However, there is a cap on the total amount of state and local taxes that can be deducted, which is $10,000. Therefore, the maximum amount Ronald can deduct is $10,000.
Since the question only asks for the amount Ronald can deduct for taxes, and not the total itemized deductions, the answer is B) $3,900, which is the sum of the real estate taxes on his personal residence, state sales taxes, and state income taxes. Federal income taxes are not included in the itemized deductions.

Ronald Pays the Following Taxes During the Year What Is the Amount Ronald Can Deduct for Taxes as Real