In year 1, Peter and Shaline Johnsen moved into a home in a new sub division.

In year 1, Peter and Shaline Johnsen moved into a home in a new sub division. Theirs was one of the first homes in the subdivision. In year 1, they paid $3,500 in real property taxes to the local government, $1,350 to the developer of the subdivision for an assessment to pay for the sidewalks, and $850 for real property taxes on land they hold as an investment. What amount of property taxes are the Johnsens allowed to deduct assuming their itemized deductions exceed the standard deduction amount before considering any property tax deductions?

Expert Solution

Solution:

The amount of itemized deductions = $3,500 - $850

= $2,650.

Allowed itemized deductions for property taxes paid = $2,650.

Note: The sum $1,350 paid to the designer of the sub division for an appraisal to pay for side strolls isn't qualified for derivation since it isn't paid to the legislature.

ekkarill92 answered 2 years ago

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