Kate itemizes in 2015. Included in her itemized deductions is $2,900 for state income taxes. Her other itemized deductions total $3,750. Kate's standard deduction amount in 2015 would have been $6,300. In 2016, Kate receives a refund from the state for $500. Which of the following best describes how Kate should handle the refund on her tax return? Kate amends her 2015 tax return and deducts only $2,400 for state income taxes. Kate reduces her state income tax deduction in 2016 by $500. Kate includes $500 in gross income in 2016. Kate includes $350 in gross income in 2016. None of the above.