In 2021, Marvin, a cash basis taxpayer, took a $2,000 itemized deduction for state income taxes paid; the deduction was not limited by the SALT cap. This increased his itemized deductions to a total that was $800 more than the standard deduction. In 2022, Marvin received a $1,500 refund when he filed his 2021 state income tax return. Marvin was in the 12% marginal tax bracket in 2021 but was in the 35% marginal tax bracket in 2022. How much must Marvin include in his gross income for 2022?
In 2021, Marvin, a cash basis taxpayer, took a $2,000 itemized deduction for state income taxes paid; the deduction was not limited by the SALT cap. This increased his itemized deductions to a total that was $800 more than the standard deduction. In 2022, Marvin received a $1,500 refund when he filed his 2021 state income tax return. Marvin was in the 12% marginal tax bracket in 2021 but was in the 35% marginal tax bracket in 2022. How much must Marvin include in his gross income for 2022?
Chapter5: Gross Income: Exclusions
Section: Chapter Questions
Problem 26CE
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Q40.
In 2021, Marvin, a cash basis taxpayer, took a $2,000 itemized deduction for state income taxes paid; the deduction was not limited by the SALT cap. This increased his itemized deductions to a total that was $800 more than the standard deduction. In 2022, Marvin received a $1,500 refund when he filed his 2021 state income tax return. Marvin was in the 12% marginal tax bracket in 2021 but was in the 35% marginal tax bracket in 2022. How much must Marvin include in his gross income for 2022?
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