On July 1 of year 1, Elaine bought a new house for $400,000. At the time of purchase, the property tax bill on the home for the year was estimated to be $8,000 ($400,000 × 2%). In the settlement statement, Elaine was charged $4,000 for the year in property taxes and the seller was charged $4,000. On December 31 of year 1, Elaine discovered that the real estate taxes on the house for the year were actually $9,000. Elaine wrote a check for $9,000 to the local government to pay the taxes for that calendar year (Elaine was responsible for the taxes because she owned the property when they were due). 

How much real estate tax can Elaine deduct for year 1?

Answer rating: 100% (QA)

To determine the amount of real estate tax that Elaine can deduct for year 1 ... View the full answer