a. Which taxes are specifically deductible for federal income tax purposes under Sec. 164? (Select all that apply.)

A.

One-half of the self-employment taxes imposed on a self-employed individual.

B.

Federal estate, inheritance, legacy, succession, and gift taxes.

C.

State, local, and foreign real property taxes

D.

State and local personal property taxes if the tax is ad valorem

E.

Charges for sewer, water, and other services

F.

State and local sales taxes if the taxpayer makes an election to deduct their state and local sales taxes instead of deducting their state and local income taxes. They make this election annually.

G.

Other state, local, and foreign taxes, which are paid or incurred in either a trade or business or an income-producing activity.

H.

The federal generation-skipping transfer tax on income distributions

I.

Special assessments against real estate for items such as sidewalks, lighting, and streets

J.

State, local, and foreign income, war profits, and excess profits tax

K.

Fee or charge imposed by a government for providing specific goods services.

b. If a tax is not specifically listed in Sec. 164, under what circumstances may it still be deductible?

A.

Certain taxes not specifically listed in Sec. 164 are deductible when the taxes were paid in connection with the acquisition of property.

B.

Certain taxes not specifically listed in Sec. 164 are still deductible when paid to a foreign government.

C.

Certain taxes not specifically listed in Sec. 164 are still deductible as itemized deductions when the total taxes paid exceed 10% of AGI.

D.

Certain taxes not specifically listed in Sec. 164 are still deductible as ordinary and necessary expenses if incurred in the taxpayer's business or income-producing activity. Taxes paid in connection with the acquisition of property (such as a sales tax) are treated as part of the cost of the property and are capitalized accordingly.