Personal Property Taxes
Response to the following problem:
Jan lives in a state that imposes a property tax on the value on motor vehicles. Karl lives in a state that imposes a flat $55 renewal fee for license tags. Jan pays the state $430 to renew her license tags. Included in this amount is a $25 license plate fee. The rest is an ad valorem tax. Discuss the tax consequences to each of these taxpayers on their federal income tax returns.