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Capitalization of real estate taxes?
Tom-65170 - 02/4/2020, 11:30 pm
IND BUS RPP

In this exam question, the partners exchanged like-kind business real property, and paid, but were not reimbursed by the prior owner, for unpaid real estate taxes. The correct answer capitalizes the taxes along with the basis of the building. Is this incorrect? I read on one of the practice questions that real estate taxes cannot be capitalized, they need to be expensed. Which is correct?

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