During 2018, Noriko paid the following taxes related to her home:
Real Estate property taxes on residence (paid from escrow account)
$ 1,800
State personal property tax on her automobile (based on value)
600
Property taxes on land held for long-term appreciation 400
What amount can Noriko deduct as property taxes in calculating itemized deductions, assuming she was under the $10,000 limit for state and local taxes, for 2018?
$400.
$1,000.
$2,400.
$2,800.
$2,800.
$1,800 + $600 +$400 = $2,800
As the state personal property tax was based on the value of her vehicle, it is a tax and not a fee, and is allowable as a deduction. The Tax Cuts and Jobs Act (TCJA) of 2017 limited the deduction for income, real estate and other state and local taxes. Beginning in 2018, the limitation for the deductibility of all state and local taxes is $10,000 ($5,000 for MFS).
