Frank Is a Resident of a State That Imposes a Tax

question 11

Multiple Choice

Frank is a resident of a state that imposes a tax on income. The following information pertaining to Frank's state income taxes is available: $\begin{array}{lr}\text { State income taxes withheld in } 2019 & \$ 3,500 \\\text { Refund of } 2018 \text { tax received in } 2019 & \$ 400 \\\text { Deficiency assessed and paid in } 2019 \text { for } 2017: & \\\text { State tax } & \$ 600 \\\text { Interest } & \$ 100\end{array}$
What amount should Frank use as state and local income taxes in calculating itemized deductions for his 2019 Federal tax return, assuming he deducts state and local income taxes?

• A)$3,500
• B)$3,700
• C)$4,100
• D)$4,200
• E)None of these

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Definitions:

Remainder Portion

The part of an estate that remains after all debts, taxes, expenses, and specific bequests have been paid or distributed, often transferred to the remainderman as specified in a will or trust.

Capital Contributions

Value or assets provided to a company by its owners or shareholders to support the business and its operations.

Income Distribution

The process of dividing and allocating income earned by a business to its stakeholders or investment products.

Personal Use

Personal use refers to the use of an asset or service for individual rather than business or commercial purposes.