Which of the Following Statements Regarding Deductions for Real Property

question 73

Multiple Choice

Which of the following statements regarding deductions for real property taxes is incorrect?

• A) A taxpayer is not allowed to deduct property taxes as the taxpayer makes monthly mortgage payments to an escrow account held by her mortgage company.
• B) Taxpayers are not allowed to deduct payments made for setting up water and sewer services.
• C) An individual deducts real property taxes on her principal residence as a for AGI deduction.
• D) Taxpayers are not allowed to deduct payments made for neighborhood sidewalks.

---

Definitions:

Minimal Losses

The smallest amount of losses that can be incurred, typically used in the context of minimizing financial or operational losses.

Marginal Revenue

The increase in earnings resulting from the sale of one extra good or service.

Economic Profit

the difference between total revenue and total opportunity costs; a measure of profit beyond the normal return on investment.

Marginal Cost

The addition to total cost from producing one additional unit of a product.