During the current year, Mr. and Mrs. West paid the following taxes:Property taxes on residence$1,900Special assessment for installation of a sewer system in their neighborhood$1,000State personal property tax on their automobile (based on value)$400Property taxes on land held for long-term appreciation$600What amount can the Wests deduct as property taxes in calculating itemized deductions for the current year?a.$0b.$2,300c.$2,900d.$1,900e.None of these choices are correct.

Taxes are the charges levied by the state and central government on total income generate by an individual during the year or sale made by firm for a period of time and capital gain earned during a year. It is charged by the interest revenue service in U.S.Option (c) $ 2,900 is correct answer. Explanation: Computation of itemized deduction for the current year: Particular Amount (in $) Property taxes on residence 1,900 Add: special assessment for installation of a sewer in their neighbourhood 1,000 Itemized deduction 2,900 State property tax and property tax on land held for long-term appreciation are not deductible items.

Answered: During the current year, Mr. and Mrs.…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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During the current year, Mr. and Mrs. West paid the following taxes:

Property taxes on residence	$1,900
Special assessment for installation of a sewer system in their neighborhood	$1,000
State personal property tax on their automobile (based on value)	$400
Property taxes on land held for long-term appreciation	$600

What amount can the Wests deduct as property taxes in calculating itemized deductions for the current year?

a.$0

b.$2,300

c.$2,900

d.$1,900

e.None of these choices are correct.

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