During the Current Year, Seth, a Self-Employed Individual, Paid the Following

question 119

Multiple Choice

During the current year, Seth, a self-employed individual, paid the following taxes: $$\begin{array} { l r } \text { Federal income tax } & \$ 15,000 \\\text { State income tax } & \$ 8,500 \\\text { Real estate taxes on land in South America (held as an investment) } & \$ 1,000 \\\text { State sales taxes } & 300 \\\text { Personal property taxes based upon value } & \$ 1,600 \\\text { Federal self-employment tax } & \$ 800\end{array}$$ What amount can Seth claim as an itemized deduction for taxes paid during the current year?

• A)$10,100
• B)$25,400
• C)$9,500
• D)$10,000
• E)None of the above

---

Definitions:

Sunk Cost

A cost that has already been incurred and cannot be recovered, which should not influence future business decisions.

Fixed Cost Financing

A financing strategy where the costs remain constant regardless of the level of production or sales.

Future Cash Flows

Expected cash receipts and payments a business anticipates receiving or paying out over a future period.

Bias

A preconception or inclination towards something, potentially leading to unfair judgments or decisions in various contexts.