Ask Question
6 April, 11:00

In 2020, Clark filed Form 1040 for the 2019 taxable year. Clark did not itemize his deductions. In 2020, Clark received a state income tax refund of $900 plus interest of $10 for overpayment of 2019 state income tax. What amount of the state tax refund and interest is taxable in Clark's 2020 federal income tax return?

A. $0

B. $10

C. $900

D. $910

+1
Answers (1)
  1. 6 April, 14:44
    0
    correct option is B. $10

    Explanation:

    given data

    state income tax refund = $900

    interest over payment = $10

    solution

    we know that Federal and the state income tax refund is an excluded from taxpayer taxable income to extent

    so that here refund will not reduces amount of tax for given earlier year

    so here amount of state tax refund and the interest is taxable in Clark 2020 federal income tax return is $10

    so here correct option is B. $10
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “In 2020, Clark filed Form 1040 for the 2019 taxable year. Clark did not itemize his deductions. In 2020, Clark received a state income tax ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers