Juan and Dorothy purchase a new residence on May 1,2016.Juan and Dorothy pay the full amount of the 2016 property taxes of $7,200 on their new house when the taxes became due in December of 2016.What amount of the taxes that Juan and Dorothy pay in December 2016 can they deduct on their 2016 tax return?
A)Zero, no amount is deductible.
B)$2,400
C)$4,800
D)$7,200

Question

Quizplus · Accepted Answer

Juan and Dorothy can only deduct the portion of the property taxes that pertains to the time they owned the home. Since they purchased the home on May 1, 2016, they owned it for 8 out of the 12 months of the year. Therefore, they can deduct 8/12 or 2/3 of the property taxes paid, which is $4,800 (2/3 of $7,200).

Juan and Dorothy Purchase a New Residence on May 1,2016