On May 1, 2018, 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, 2018.
I.Linda has a gain on the sale of the rental property of $50,000.
II.Linda can deduct $500 in real estate taxes.

Question

On May 1, 2018, 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, 2018.
I.Linda has a gain on the sale of the rental property of $50,000.
II.Linda can deduct $500 in real estate taxes.
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Quizplus · Accepted Answer

The Answer of On May 1, 2018, 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, 2018.
I.Linda has a gain on the sale of the rental property of $50,000.
II.Linda can deduct $500 in real estate taxes.
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On May 1, 2018, Linda Sells Her Rental Property for $125,000