Morris Is a Single Individual Who Has Total Itemized Deductions

Multiple Choice

Morris is a single individual who has total itemized deductions in 2018 of $12,500. His itemized deductions include $2,000 for state income taxes. After filing his 2018 state income tax return he receives a refund of $275.

A) Morris must include $275 as income on his 2018 federal income tax return.
B) Morris must amend his 2018 federal tax return to reflect state income taxes of $1,725 ($2,000 - $275) .
C) If Morris itemizes his tax return in 2019 he must reduce his state tax deduction by $275.
D) Morris must include $200 as income on his 2019 federal income tax return.
E) Morris does not have to report any of the state income tax refund on his 2019 tax return.