Ernie sold his personal residence to Amanda on July 1,2010.He had paid $3,900 in real property taxes on March 1,2010,the due date for property taxes for 2010.Ernie must reduce the amount realized for his property by the portion of the $3,900 allocable to Amanda.

Question

Quizplus · Accepted Answer

Since Ernie sold his property to Amanda on July 1, 2010, Amanda is responsible for the property taxes from that point forward. Therefore, Ernie must reduce the amount realized for his property by the portion of the $3,900 in property taxes allocable to Amanda, as she will be responsible for paying those taxes for the rest of the year.

Ernie Sold His Personal Residence to Amanda on July 1,2010