In Lawrence 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 (assume this year is not a leap year). The tax is payable on June 1. On May 1, Reggie sells his house to Dana for $350,000. On June 1, Dana pays the entire real estate tax of $7,950 for the year ending December 31. Assuming that Reggie itemizes his deductions and the $10,000 limit on state and local taxes does not apply, how much of the property taxes may Reggie deduct?
A) $0
B) $2,614
C) $2,625
D) $7,950
E) None of the above

Question

Quizplus · Accepted Answer

Reggie is only liable for the real property tax for the portion of the year in which he owned the property. Since he sold the property on May 1, he is liable for the tax for the first four months of the year (January 1 to April 30). The tax for the first four months of the year is calculated as follows: 
($7,950 ÷ 12 months) x 4 months = $2,640
Therefore, Reggie may deduct $2,640 for real property taxes on his tax return.

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