Wilma,who Uses the Cash Method of Accounting,lives in a State

Essay

Wilma,who uses the cash method of accounting,lives in a state that imposes an income tax.In April 2010,she files her state income tax return for 2009 and pays an additional $1,000 in state income taxes.During 2010,her withholdings for state income tax purposes amount to $7,400,and she pays estimated state income tax of $700.In April 2011,she files her state income tax return for 2010 claiming a refund of $1,800.Wilma receives the refund in August 2011.
a.Assuming Wilma itemized deductions in 2010,how much may she claim as a deduction for state income taxes on her Federal income tax return for calendar year 2010 (filed in April 2011)?
b.Assuming Wilma itemized deductions in 2010,how will the refund of $1,800 that she received in 2011 be treated for Federal income tax purposes?
c.Assume that Wilma itemized deductions in 2010 and that she elects to have the $1,800 refund applied toward her 2011 state income tax liability.How will the $1,800 be treated for Federal income tax purposes?
d.Assuming Wilma did not itemize deductions in 2010,how will the refund of $1,800 received in 2011 be treated for Federal income tax purposes?