Joanne,a Single Individual,has $2,000 in State Taxes Withheld from Her

question 130

Multiple Choice

Joanne,a single individual,has $2,000 in state taxes withheld from her salary in 2016.Her total itemized deductions are $6,350.She claims the $2,000 as an itemized deduction on her 2016 tax return.In 2017 she receives a state income tax refund of $700.Under the tax benefit rule she has to report income in 2017 of

• A)$2,000
• B)$ 700.
• C)$ 50.
• D)$ -0-.
• E)$ -0-, but Joanne must file an amended 2016 tax and reduce her itemized deductions by $700.