326 – Taxes Payable – Real Estate

Current Liabilities

Accrued Liabilities

Synopsis

Account 326

Debits

Credits

  1. Payments made for taxes accrued on real property.

  1. Monthly provision for real property tax.

 

Remarks:

Most real estate taxes must be prepaid or accrued.  Prepare a schedule of each tax liability as support for the balances both in Prepaid Expenses - Taxes and in Taxes Payable - Real Estate.

Real estate tax bills may not be received for several months into the tax year of the taxing authority.  In this event, it is necessary to estimate the tax liability on real estate.  The estimate should charge each month with an approximately equal share of taxes on real estate.  When the tax bill is received, payment should be debited to Account 326 with any adjustments made to expense Account 84 – Taxes – Real Estate.

Note: