Sally owns real property for which the annual property taxes are $9,000. She sells the property to Kate on March 9, 2021, for $550,000.Kate pays the real property taxes for the entire year on October 1, 2021.Assume a 365-day year. Round any division to four decimal places. Round your final answers to the nearest dollar.a. How much of the property taxes can be deducted by Sally and how much by Kate?Sally can deduct $1,652and Kate can deduct $7,348of the property taxes.b. What effect does the property tax apportionment have on Kate's adjusted basis in the property?Kate's adjusted basis for the property is increasedby the $1,652she paid that is apportioned to Sally.c. What effect does the apportionment have on Sally's amount realized from the sale?Sally paid none of the real property taxes and ispermitted to deduct the apportioned share of $542,652Her amountrealized is increasedby this amount.d. How would the answers in parts (b) and (c) differ if Sally paid the taxes?If Sally paid the taxes, Sally's amount realized would be $Kate's adjusted basis would be $

Sally owns real property for which the annual property taxes are $9,000. She sells the property to Kate on March 9, 2021, for $550,000 Kate pays the real property taxes for the entire year on October 1, 2021. Assume a 365-day year. Round any division to four decimal places. Round your final answers to the nearest dollar.

Sally owns real property for which the annual property taxes are $9,000. She sells the property to Kate on March 9, 2021, for $550,000 Kate pays the real property taxes for the entire year on October 1, 2021. Assume a 365-day year. Round any division to four decimal places. Round your final answers to the nearest dollar.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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