McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 38

Craig and Karen Conder purchased a new home on May 1 of year 1 for $200,000.At the time of the purchase, it was estimated that the real property tax rate for the year would be one percent of the property's value.How much in property taxes on the new home are the Conders allowed to deduct under each of the following circumstances (the Conders' itemized deductions exceed the standard deduction before considering property taxes)?
a.The property tax estimate proves to be accurate.The seller and the Conders paid their share of the tax.The full property tax bill is paid to the taxing jurisdiction by the end of the year.b.The actual property tax bill turns out to be 1.5 percent of the property's value.The Conder's paid their share of the estimated tax bill and the entire difference between the one percent estimate and the 1.5 percent actual tax bill and the seller paid the rest.The full property tax bill is paid to the taxing jurisdiction by the end of the year.c.The actual property tax bill turns out to be.5 percent of the property's value.The seller paid taxes based on their share of the one percent estimate and the Conders paid the difference between what the seller paid and the amount of the final tax bill.The full property tax bill is paid to the taxing jurisdiction by the end of the year.