During 2018 and 2019, Danny Pays Property Taxes of $3,500

question 978

Multiple Choice

During 2018 and 2019, Danny pays property taxes of $3,500 each year on a piece of land. During 2018, the land is vacant and unproductive. In 2019, Danny uses the land as a parking lot and generates $16,000 in income. Which of the following is true regarding the property taxes?

• A) Capitalize $3,500 each year.
• B) Capitalize $3,500 in 2018 and deduct $3,500 in 2019.
• C) Deduct $3,500 each year.
• D) Either B or C is acceptable.

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