Margarita, a Single Individual, Has $2,000 in State Taxes Withheld

question 42

Multiple Choice

Margarita, a single individual, has $2,000 in state taxes withheld from her salary in 2013. Her total itemized deductions are $7,500. She claims the $2,000 as an itemized deduction on her 2013 tax return. In 2014, she receives a state income tax refund of $400. Under the tax benefit rule she has to report income in 2014 of

• A) $2,000.
• B) $ 400.
• C) $ 200.
• D) $ -0-.
• E) $ -0-, but Margarita must file an amended 2011 tax and reduce her itemized deductions by $400.

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Definitions:

Tipping

The practice of giving a small amount of money to someone who has provided a service, on top of the basic price.

Political Balance

The concept of maintaining equilibrium among various political forces or interests within a society or institution.

Single-Member Plurality System

An electoral system in which candidates compete for a single representative seat from an electoral district, and the candidate receiving the most votes wins.

Proportional Representation System

An electoral arrangement that translates the number of votes received by political parties into a proportionate number of seats in the legislative body.