Question

Uring the current year, Mr. and Mrs. West paid the following taxes:

Property taxes on residence $1,900
Special assessment for installation of a sewer system in their neighborhood $1,000
State personal property tax on their automobile (based on value) $400
Property taxes on land held for long-term appreciation $600
What amount can the Wests deduct as property taxes in calculating itemized deductions for the current year?

a. $2,900
b. $2,300
c. $1,900
d. $0
e. None of these choices are correct.

Answer 1

b. $2300

Explanation:

The itemized method to calculate taxes is used to save rather than being charged a fixed tax rate on all your income which can be much costly and wont really easily get tax returns from, so tax is calculate on single items where receipts are used as proof and also data of an individuals taxes on a specific period so on this problem the itemized property taxes for the current year will be the property taxes on residence plus the state personal property tax on their automobile as these two are considered as their property in which they use for frequent operations on a month to moth basis if not daily through the year.