Question

In Adelaide 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, 2020. The tax is payable on June 1, 2020. On April 30, 2020, Julio sells his house to Victoria for $230,000. On June 1, 2020, Victoria pays the entire real estate tax of $7,300 for the year ending December 31, 2020. How much of the property taxes may Julio deduct?

a.$2,400
b.$0
c.$2,380
d.$7,300
e.$4,920

Answer 1

Option (c), Julio can deduct $2,380 of the property taxes for the period he owned the house, which accounts for 120 days of ownership in the year 2020.

Step-by-step explanation:

In Adelaide County, property taxes are imposed on the owner of the property as of January 1 of the tax year. When Julio sold his house to Victoria on April 30, 2020, he had owned the home for a portion of the year before the transfer of ownership.

To calculate Julio's portion of the tax he can deduct, we need to determine the amount of time he was the owner in the tax year, which is 120 days (January 1 to April 30), out of the full year of 365 days.

By dividing the number of days Julio owned the property by the total number of days in the year, and multiplying by the total property tax, we get the portion of the tax attributable to his ownership:

(120 days / 365 days) × $7,300 = $2,383.56 (rounded to $2,380)

Therefore, Julio can deduct $2,380 of the property taxes.