Martin receives the following tax bills, related to a rental dwelling, from the county treasurer:

Special assessment for installing sidewalks and streets	$12,000
Real property tax on dwelling for the 1/1/1812/31/18 property tax year, due on 10/1/18	$1,500

On May 1, 2018, Martin sells the dwelling for $70,000. His basis in the dwelling at the date of sale is $40,000. Martin's basis in the dwelling does not reflect the property tax bills. As part of the sale contract, the buyer agrees to pay the real property taxes when they come due on October 1, 2018, but Martin has to pay the special assessment before the sale closes.

Complete the statements below which outline the proper tax treatment for each tax payment. Do not round intermediate calculations.

The tax imposed for local benefit is deemed to increase the basis of the taxpayer's property. When the seller pays the $12,000 special assessment, the expenditure is added to the basis as a capital expenditure .

When the rental dwelling is sold, the annual real estate tax must be allocated between the buyer and the seller of the property. The allocation is $ ______for Martin and $ ______for the buyer.

Martin has a gain of $ ______on the sale of the dwelling.