On May 1,2013,Linda sells her rental property for $125,000.Her basis in the property at the beginning of the year is $75,000.As part of the sales contract,the buyer agrees to pay the real property taxes of $1,500 for the current year when they come due on December 31,2013.
I.Linda has a gain on the sale of the rental property of $50,000.
II.Linda can deduct $500 in real estate taxes.
A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.
Correct Answer:
Verified
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