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Practice CPA®CPA TCP Practice ExamQuestion 14

Easy1 markMultiple Choice

Area 1: Individual TaxTCPIndividual TaxSALT

CPA · Question 14 · Area 1: Individual Tax

A taxpayer pays $15,000 in state income taxes and $8,000 in real estate taxes in Year 1. They are married filing jointly. What is their allowable SALT (State and Local Tax) deduction for Year 1?

Answer options:

A.

$23,000

B.

$10,000

C.

$15,000

D.

$5,000

How to approach this question

1. Identify SALT payments: $15,000 + $8,000 = $23,000.<br/>2. Apply TCJA Limit: Capped at $10,000 per year for MFJ ($5,000 for MFS).<br/>3. Result: $10,000.

Full Answer

B.$10,000✓ Correct

The aggregate deduction for state and local income taxes and property taxes is limited to $10,000 per year ($5,000 if married filing separately).

Common mistakes

Deducting the full amount paid.

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