85 - amount deducted in the prior year or(c the amount by...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Under what circumstances is a state or local income tax refund included in the taxable income of a taxpayer? Answer: If a taxpayer deducted state or local taxes as an itemized deduction in the prior year, the taxpayer must report income in the year in which the refund was received. The taxable amount is the lesser of (a) the amount received, or (b) the
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: amount deducted in the prior year, or (c) the amount by which the itemized deductions exceed the standard deduction. If the taxpayer did not itemize deductions in the prior year (i.e., took the standard deduction), no amount of the refund is taxable....
View Full Document

This note was uploaded on 09/16/2011 for the course ACCT 145 taught by Professor Eric during the Spring '11 term at Palm Beach Community College.

Ask a homework question - tutors are online