Question

Lina paid the following taxes this year:

Real estate taxes on a rental property she owns	$5,500
Real estate taxes on her own residence	4,200
Federal income taxes	12,000
State income taxes	7,500

For 2020, what amount of taxes (SALT) can Lina deduct as an itemized deduction on her tax return?

A) $5,200  

B) $9,700

C) $10,000

D) $19,200

Answer 1

Correct option is "C" -10000

One can claim deductions for SALT (State and local taxes ),property taxes however the amount of deductions cannot exceed $10000

Total state and local taxes = Federal income taxes +state income taxes

                            = 12000 +7500

                           = 19500

Amount of SALT deduction that can be claimes is equals to lower of 10000 or 19500 = 10000