Question

[The following information applies to the questions displayed below.] Charles has AGI of $50,000 and has made the following payments related to (1) land he inherited from his deceased aunt and (2) a personal vacation taken last year. State inheritance tax on the land $ 1,430 County real estate tax on the land 1,970 School district tax on the land 873 City special assessment on the land (new curbs and gutters) 813 State tax on airline tickets (paid on vacation) 303 Local hotel tax (paid during vacation) 292 Calculate the amount of taxes Charles may include in his itemized deductions for the year under the following circumstances: (Leave no answer blank. Enter zero if applicable.)

b. Suppose that Charles holds the land for rent.

c. Suppose that Charles holds the land for appreciation and that the vacation was actually a business trip.

Answer 1

a) If Charles holds the land for appreciation :-

Deductible Taxes From AGI :-

= $873  + $873

= $2843

b) If Charles Holds the Land for Rent :-

Deductible Taxes From AGI :-

= $873 + $873

= $2843

c) Charles holds the land for appreciation and that the vacation was actually a business trip.

= $873 + $873

= $2843

Scenario 2 for

C)Charles holds the land for appreciation and that the vacation was actually a business trip.

The estate tax and the special charge or tax will not deductible (as above). Yet, airline tax and the hotel tax decrease unreimbursed company liabilities (diverse listed decrease subjected to 2% AGI floor)

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