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please help with the tax accounting question. please provide step by step solution. thanks so so much Exercise 13-25 (Algorithmic) (LO. 1) Sally owns real
please help with the tax accounting question. please provide step by step solution. thanks so so much
Exercise 13-25 (Algorithmic) (LO. 1) Sally owns real property for which the annual property taxes are $14,430. She sells the property to Kate on April 2, 2020, for $721,500. Kate pays the real property taxes for the entire year on October 1, 2020. 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 $ 2,649 X and Kate can deduct $ of the property taxes. Feedback Check My Work The term sale or other disposition is defined broadly in the tax law and includes virtually any disposition of property. Realized gain or loss is the difference between the amount realized from the sale or other disposition of property and the property's adjusted basis on the date of disposition. 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 increased by the $ she paid that is apportioned to Sally. Feedback Check My Work Partially correct c. What effect does the apportionment have on Sally's amount realized from the sale? . Her amount Sally paid none of the real property taxes and is permitted to deduct the apportioned share of realized is increased by this amount. Feedback Check My Work Partially correct 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 $Step by Step Solution
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