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Your new client Janey just moved to Dallas from California in January. Here are some SALT (State and Local Tax)-related facts regarding Janeys 2020 tax

Your new client Janey just moved to Dallas from California in January. Here are some SALT (State and Local Tax)-related facts regarding Janeys 2020 tax year, during all of which she was living in the Golden State:

  • Janey paid $4,000 in California income taxes by way of payroll withholding by her employer. Now that youve finished Janeys 2020 California income tax return it turns out that she owed only $3,400 shell get a $600 refund!
  • The IRS sales tax deduction table [textbook Exhibit 8-3] says that Janeys 2020 deduction for sales taxes is $1,730. However, Janey saved every receipt for every single thing she purchased during 2020 and knows that, not counting the new car she bought in December, her actual total sales tax paid was $2,900.
  • Janey paid another $4,000 in California sales tax on the purchase of her new car.
  • Janey sold her house in California on December 31, 2020. Her property tax bill for the year was $4,000, $2,000 of which she paid in December 2020 and the other $2,000 in January 2021.

As Janeys CPA, how much will you see on line 7 of Janeys Schedule A when youve finished preparing her 2020 Form 1040? Explain in 3-4 sentences.

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