Rocco owns a piece of land as investment property. He acquired the land in 1995 for $18,000.
Question:
Rocco owns a piece of land as investment property. He acquired the land in 1995 for $18,000. On June 1, 2021, he sells the land for $80,000. As part of the sale, the buyer agrees to pay all of the property taxes ($3,600) for the year.
a. What is Rocco’s gain on the sale of the land?
b. What amount of the property taxes can Rocco deduct? What amount can the buyer deduct?
c. What is the buyer’s basis in the land?
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a Because the buyer paid the real estate tax the sale price is increased by the amount of Roccos sha...View the full answer
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Related Book For 
Concepts In Federal Taxation 2022
ISBN: 9780357515785
29th Edition
Authors: Kevin E. Murphy, Mark Higgins, Tonya K. Flesher
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