Calculating the Allowable Portion
Juan and Judith are Puerto Rican residents under age 65 who use the Married Filing Jointly filing status. Juan earned $39,780 working for the federal government during this tax year. Judith made $19,520 from her job at a bank in Puerto Rico.
They have a total of $16,223 in itemized deductions that do not apply to a specific type of income.
The formula for calculating the allowable portion of a deduction is:
(Gross taxable income subject to U.S. tax / Gross income from all sources) x
What is the allowable portion of each of these deductions?