Question

This year Norma paid $1,200 of real estate taxes on her personal residence. Norma's other itemized deductions (state income taxes) only amount to $3,100. Which of the following is a true statement if Norma files single with one personal exemption?

A. Norma can deduct 4,300 for AGI.

B. Norma can deduct $1,200 even if her standard deduction is $6,200.

C. Norma should deduct $4,300 even if her standard deduction is $6,200.

D. Norma can deduct $3,100 even if her standard deduction is $6,200.

E. Norma should claim the standard deduction.

Answer 1

The correct statement is B. Norma can deduct $1,200 even if her standard deduction is $6,200. Option B

Step-by-step explanation:

The correct statement in this case is B. Norma can deduct $1,200 even if her standard deduction is $6,200.

Itemized deductions are expenses that individuals can deduct from their taxable income, reducing the amount of tax they owe. One of the itemized deductions is real estate taxes paid on a personal residence. In this case, Norma paid $1,200 of real estate taxes, which can be deducted from her taxable income.

The standard deduction, on the other hand, is a fixed amount that individuals can choose to deduct instead of itemizing their deductions. If Norma's standard deduction is $6,200, she can still deduct the $1,200 of real estate taxes regardless.

The standard deduction is a minimum deduction available to all taxpayers, regardless of their itemized deductions. So, even if Norma's state income taxes amount to $3,100, she can still deduct the $1,200 of real estate taxes. Option B