Question

Exercise 5-5 (Algorithmic) (LO. 6) Tabitha sells real estate on March 2 of the current year for $341,200. The buyer, Ramona, pays the real estate taxes of $17,060 for the calendar year, which is the real estate property tax year. Round any division to four decimal places and use in subsequent calculations. Round your final answers to the nearest dollar. Assume a 365-day year. a. Determine the real estate taxes apportioned to and deductible by the seller, Tabitha, and the amount of taxes deductible by Ramona. Tabitha: $ Ramona: $ b. Calculate Ramona's basis in the property and the amount realized by Tabitha from the sale. Tabitha: $ Ramona: $

Answer 1

Answer: a) 1. Tabitha : $2,805 Ramona: $14,255 b) Tabitha: $344,005 : Ramona: $344.005. then = o x $17,060 Explanations Dreal estate taxes is apportiones - Days owned $17,060 to and deductable by the seller, Tabitha - 365 : G04 = 365 $17,060 .$$ sety a. 016u4X$17,060 - $2805

Amount deductable Days owneé : 365 $17,060 sy Ramona 365. :: Bob + $17,000 -0.8356 x$17,060 = $14,255 2) Ramone's basis is increasca to $3uh,ooglie $341,2004 $2,805), and the amount realized by Tabitha from the sale is increased to $344,005. Mole': The real estate tances for the entire year care apportioned between the buyer and seller on the basis of the number of days the property was held by the each during the real properly toux year. For Geleval income tax purposes the seller is treated as paying the properly loxes up to but not including the date & sale. The buyer is treated as paying the taxes beginning with the dale U sale

Hit the LIKE Button.