Under current federal law, how may an itemizing homeowner deduct property taxes on a personal residence?
Correct Answer
B) Only within a combined state-and-local-tax cap that phases down at higher incomes
Property tax on a personal residence is deductible only by a homeowner who itemizes, and then only inside the combined limit that IRC 164(b)(6) places on state and local taxes: property tax and state income or sales tax share one cap. Congress raised and indexed that cap in 2025 and added a phase-down for high-income filers, with the higher amount scheduled to lapse later this decade, so the dollar figure moves while the structure does not. The practical point is that a homeowner with both a large property tax bill and a large state income tax bill cannot deduct both in full.
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Constructive notice is the legal presumption that a person has knowledge of information that is available through public records or visible inspection of the property, regardless of whether they actually knew about it.
A deed is a written legal document that conveys (transfers) ownership of real property from one party to another. It must be delivered to and accepted by the grantee to be effective.
For a deed to be valid, it must contain several essential elements including a competent grantor, identifiable grantee, consideration, legal description, granting clause, signature of the grantor, and delivery and acceptance.
More Transfer Of Property Questions
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When the administrator of an estate sells a parcel:
- → Kevin buys a home in Oakland and takes a CLTA standard coverage owner's policy at closing. Eight months later a contractor who had finished work for the prior owner before the sale records a mechanic's lien against the property. Nothing about that work or the contractor's claim appeared in the public record on the date Kevin's policy was issued. How is Kevin's claim under his policy most likely to be treated?
- → Owner A received a deed to a California property in January 2024 and recorded it that same month. In March 2024 the same grantor deeded the property to Owner B, who paid fair market value, searched no records, and recorded immediately. Under California's race-notice recording statute, which owner prevails?
- → Under California law, what is the consequence when a property buyer fails to file the Preliminary Change of Ownership Report (PCOR) at the time the deed is recorded?
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- → A California buyer's agent explains the concept of 'split escrow' to her client. In California, what does the term 'split escrow' refer to?
- → All of the following are sufficient to transfer an interest in real estate, except:
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- → A foreign investor (non-U.S. person) sells a California rental property for $800,000. The property carries a mortgage balance of $700,000. The escrow officer calculates that the combined federal FIRPTA withholding (15%) and California state withholding (3 1/3%) totals about $146,667, which exceeds the seller's net equity of $100,000 after paying off the mortgage. What is the most appropriate course of action?
- → In a deed, the clause that defines the nature of the estate being granted is the:
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