In Shelby County, the real property tax year is the calendar year. The real property tax becomes a personal liability of the owner of real property on January 1 in the current real property tax year, 2012. The tax is payable on June 1, 2012. On April 30, 2012, Julio sells his house to Anita for $230,000. On June 1, 2012, Anita pays the entire real estate tax of $7,300 for the year ending December 31, 2012. How much of the property taxes may Julio deduct?

Question

Quizplus · Accepted Answer

Julio owned the property on January 1 and became liable for the property tax for the year 2012. Even though Anita paid the entire tax bill, Julio is entitled to deduct the property taxes for the period he owned the property in 2012, which is from January 1 to April 30 (the date of sale). This is a total of 4 months out of the 12-month tax year, or 4/12 of the total tax bill. Therefore, Julio may deduct $2,380 (4/12 x $7,300) in property taxes on his tax return.

In Shelby County, the Real Property Tax Year Is the Calendar