McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 42

Louis files as a single taxpayer.In April of this year he received a $900 refund of state income taxes that he paid last year.How much of the refund, if any, must Louis include in gross income under the following independent scenarios? Assume the standard deduction last year was $5,700.a.Last year Louis claimed itemized deductions of $6,050.Louis's itemized deductions included state income taxes paid of $1,750.b.Last year Louis had itemized deductions of $4,800 and he chose to claim the standard deduction.Louis's itemized deductions included state income taxes paid of $1,750.c.Last year Louis claimed itemized deductions of $7,540.Louis's itemized deductions included state income taxes paid of $2,750.