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westin paid the following taxes this year: real estate taxes on rental property he owns $4,000 real estate taxes on his own residence 3,600 federal income taxes 18,000 state income taxes 5,400 local city income taxes 1,500 what amount can westin deduct as an itemized deduction on his tax return? a) $10,000 b) $28,500 c) $10,500 d) $14,500

User Bukola
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1 Answer

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Final answer:

The maximum itemized deduction Westin can claim is likely $10,000 due to the cap on state and local tax deductions, which includes his property taxes and income taxes combined. Therefore, the correct option is a) $10,000.

Step-by-step explanation:

Westin needs to calculate his itemized deduction for his tax return. The relevant taxes he paid that can potentially be itemized include real estate taxes on his rental property and primary residence, federal income taxes, state income taxes, and local city income taxes. As of recent tax law, there is a cap on the amount of state and local taxes (SALT) that can be deducted, which is $10,000.

Thus, combining the real estate taxes on his residence of $3,600 and the cap of $10,000 for state and local taxes (including real estate taxes on his rental property), the maximum he can deduct is $3,600 + $10,000 = $13,600. However, as no breakdown between real estate taxes for the rental property and income taxes is provided that can impact the exact number below the SALT limit, and given the choices provided, the closest answer that Westin can deduct would be $10,000, matching the SALT deduction cap since his payments for state and local taxes exceed this limit.

User Ialphan
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