In year 1, Peter and Shaline Johnsen moved into a home in a new subdivision. The
ID: 2582654 • Letter: I
Question
In year 1, Peter and Shaline Johnsen moved into a home in a new subdivision. Theirs was one of the first homes in the subdivision. In year 1, they paid $1,400 in real property taxes on the home to the state government, $500 to the developer of the subdivision for an assessment to pay for the sidewalks, and $800 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?
Explanation / Answer
Johnsens may deduct $2200 of property taxes as itemized deductions. Paid in property tax on home 1400 Add: paid real property tax on land 800 TOTAL 2200