Question

Tabitha sells real estate on March 2 of the current year for $334,000. The buyer, Ramona, pays the real estate taxes of $16,700 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.

Answer 1

Requirement "Determine the real estate taxes apportioned to and deductible by the seller, Tabitha, and the amount of taxes deductible by Ramona. Tabitha"

Tabitha will pay the Real estate tax until March 1 and this would be deductible from Tabitha. No of days = 60 days (January 1 to March 1)

Amount of tax deductible from Tabitha = $16,700* (60/365)

= $16,700 * 0.1644

= $2,745.48

= $2,745

Amount of tax deductible from Ramona = $16,700 * (305/365)

= $16,700 * 0.8356

= $13954.52

= $13,955