A taxpayer has $5,000 in investment expenses connected to portfolio income and is in the 8% tax bracket. Assuming the taxpayer itemizes their California return, and that these expenses are the only type of expense in their "class" of deduction, 

what tax savings will they recognize if they have an AGI of $75,000?\\n\\n $400; The $5,000 in expenses at an 8% rate nets them a total savings of $400 on the return.\\n $0; The expenses are not greater than 7.5% of AGI and therefore no amount is deducted even if the expenses are otherwise deductible.\\n $280; The 2% AGI limitation lets them use $3,500 of their expenses, at an 8% rate of savings for a total savings of $280.\\n $0; California lacks the ability to deduct investment expenses related to portfolio income.

Answer rating: 100% (QA)

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