Question

In February of the current year (assume a non-leap year), Ramone and Maria received their property...

In February of the current year (assume a non-leap year), Ramone and Maria received their property tax statement for last calendar-year taxes of $2,500, which they paid to the taxing authority on March 1 of the current year. They had purchased their home on May 1 last year. What amount of property tax on this statement may they claim as an itemized deduction this year (rounded)?

A) $0 B) $1,250 C) $1,678 D) $2,500

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Answer #1

As the home is purchased on May 1 last year. The itemized deduction for the year will be for 245 days (i.e. from May 1 to Dec 31).

Total days in the non-leap year = 365 days

Days from May 1 to Dec 31 = May+Jun+Jul+Aug+Sep+Oct+Nov+Dec

= 31+30+31+31+30+31+30+31 = 245 days

Amount of Property Tax allowed = Property tax paid*(245 days/365 days)

= $2,500*245/365 = $1,678

The amount of property tax on this statement that can be claimed as an itemized deduction this year is $1,678.

Hence the correct option is C) $1,678.

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