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State and local, and foreign, real property taxes; (2) State and
local personal property taxes; (3) State and local, and foreign,
income, war profits, and excess profits taxes; (4) generation
skipping transfer tax imposed on income distributions; and (5)
environmental tax. Prior to 1986, section 164(a)(4) allowed a
deduction for State and local sales taxes paid during the taxable
year. Section 164(a)(4) was repealed by section 134(a)(1) of the
Tax Reform Act of 1986, Pub. L. 99-514, 100 Stat. 2116.
Section 164(a) is clear as to what types of taxes are
deductible by the taxpayer. We hold that petitioner is not
entitled to deduct Social Security, Medicare, or sales taxes
under section 164(a). The only taxes that are deductible under
section 164 are the State and local taxes withheld from
petitioner’s wages. The total amount of these taxes is less than
the standard deduction that respondent allowed ($3,800).
Therefore, the standard deduction will be applied.
Moreover, it is unclear whether and to what extent any
Social Security benefits were repaid by petitioner in 1994.
Nevertheless, even if he did repay $905 in 1994, he is not
entitled to the deduction under section 1341. Section 1341
provides relief to a taxpayer who received income in 1 year under
7(...continued)
(1) Federal income taxes, including--
(A) the tax imposed by section 3101 (relating to the
tax on employees under the Federal Insurance Contributions Act);
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