Morris Is a Single Individual Who Has Total Itemized Deductions

question 121

Multiple Choice

Morris is a single individual who has total itemized deductions in 2013 of $6,150.His itemized deductions include $2,000 for state income taxes.After filing his 2013 state income tax return he receives a refund of $275.

• A)Morris must include $275 as income on his 2014 federal income tax return.
• B)Morris must amend his 2013 federal tax return to reflect state income taxes of $1,725 ($2,000 - $275).
• C)If Morris itemizes his tax return in 2014 he must reduce his state tax deduction by $275.
• D)Morris must include $200 as income on his 2014 federal income tax return.
• E)Morris does not have to report any of the state income tax refund on his 2014 tax return.