The new law limits the aggregate deduction for state and local real property taxes, personal property taxes, state and local income and general sales taxes (if elected) for any tax year to $10,000 ($5,000 for marrieds filing separately).

Important exception: The limit doesn’t apply to state and local, real property taxes; and state and local personal property taxes if those taxes are paid or accrued in carrying on a trade or business or in an activity engaged in for the production of income, such as rental income.