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    Tax deductions: Schedule A taxes for Hugh

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    During the current year, Hugh, a self-employed individual, paid the following amounts:

    Real estate tax on Iowa residence $3,800
    State income tax 1,700
    Real estate taxes on land in Puerto Rico (held as an investment) 1,100
    Gift tax paid on gift to daughter 1,200
    State sales taxes 1,750
    State occupational license fee 300
    Property tax on value of his automobile (used 100% for business) 475

    What is the maximum amount Hugh can claim as taxes in itemizing deductions from AGI?
    a) $6,600.
    d) $8,625.
    e) None of the above.

    And why...

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    Solution Preview

    For Schedule A and itemizing taxes, following are the rules:

    1. Real estate taxes of $3800 are fully deductible
    2. State income tax of ...

    Solution Summary

    The solution explains which of the list of taxes are actually deductible as Schedule A - taxes. An explanation is included for items which are not part of the deductible amount.