ExpertEasy1 markMultiple Choice
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?
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
B
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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