Question

Charles has AGI of $40,500 and has made the following payments related to (1) land he inherited from his deceased aunt and (2) a personal vacation taken last year.

State inheritance tax on the land $ 1,380
County real estate tax on the land 2,410
School district tax on the land 798
City special assessment on the land (new curbs and gutters) 729
State tax on airline tickets (paid on vacation) 309
Local hotel tax (paid during vacation) 205




Calculate the amount of taxes Charles may include in his itemized deductions for the year under the following circumstances: (Leave no answer blank. Enter zero if applicable.)



c. Suppose that Charles holds the land for appreciation and that the vacation was actually a business trip.

Answer 1

Charles can include state inheritance tax, county real estate tax, school district tax, city special assessment, state tax on airline tickets, and local hotel tax in his itemized deductions. If the land is held for appreciation and the vacation was a business trip, Charles may be able to deduct the expenses related to the business trip as business expenses.

Step-by-step explanation:

Charles can include the following taxes in his itemized deductions for the year:

• State inheritance tax on the land ($1,380)
• County real estate tax on the land ($2,410)
• School district tax on the land ($798)
• City special assessment on the land ($729)
• State tax on airline tickets (paid on vacation) ($309)
• Local hotel tax (paid during vacation) ($205)

However, if the land is held for appreciation and the vacation was a business trip, Charles may be able to deduct the expenses related to the business trip, such as the state tax on airline tickets and the local hotel tax, as business expenses.