Ronald pays the following taxes during the year:
?
$$\begin{array} { l r }
\text { Real estate taxes on his personal residence } & \$ 4,500 \
\text { Real estate taxes on rental property } & 2,000 \
\text { State sal es taxes (from Federal Sales tax table) } & 1,000 \
\text { State income taxes } & 7,400 \
\text { Federal income taxes } & 5,400
\end{array}$$
What is the amount Ronald can deduct for taxes as an itemized deduction for the year?

Question

Ronald pays the following taxes during the year:
?
$$\begin{array} { l r } 
\text { Real estate taxes on his personal residence } & \$ 4,500 \
\text { Real estate taxes on rental property } & 2,000 \
\text { State sal es taxes (from Federal Sales tax table) } & 1,000 \
\text { State income taxes } & 7,400 \
\text { Federal income taxes } & 5,400
\end{array}$$
What is the amount Ronald can deduct for taxes as an itemized deduction for the year?

Quizplus · Accepted Answer

Ronald can deduct real estate taxes on his personal residence ($4,500), state sales taxes ($1,000), and state income taxes ($7,400) as itemized deductions. However, federal income taxes and real estate taxes on rental property are not deductible as personal expenses. The rental property taxes are deductible on Schedule E, not as an itemized deduction on Schedule A. Therefore, the total deductible amount is $4,500 + $1,000 + $7,400 = $12,900. However, due to the SALT (State and Local Taxes) deduction cap, the maximum amount he can deduct for state and local taxes (which includes state income taxes and real estate taxes on his personal residence) is $10,000. Thus, the correct answer is $10,000.

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

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