If real property is sold during the year the property taxes must be allocated between the...

If real property is sold during the year the property taxes must be allocated between the buyer and seller based on the numbr of days the property was held by each party? true or false ?

Accounting subject

Expert Solution

TRUE:

If real property is being sold, the settlement agent divides the tax period into 2 parts ie, the time that the buyer owned the property and the time that the seller owned the property. The division follows the rules set down by the IRS for deducting property taxes from taxable income: The seller is responsible for the property taxes up to, but not including, the date the property was sold. The buyer is responsible for taxes on the sale date and afterward.

ekkarill92 answered 2 years ago

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