Bert Corporation, a calendar-year taxpayer, owns property in States M and O.Both M and O require that the average value of assets be included in the property factor.M requires that the property be valued at its historical cost, and O requires that the property be included in the property factor at its net depreciated book value. Bert's M property factor is:

Question

Bert Corporation, a calendar-year taxpayer, owns property in States M and O.Both M and O require that the average value of assets be included in the property factor.M requires that the property be valued at its historical cost, and O requires that the property be included in the property factor at its net depreciated book value.   Bert's M property factor is:

Quizplus · Accepted Answer

To calculate the property factor, we need to divide the average value of the taxpayer's property in the state by the average value of all the taxpayer's property. For the M property factor, the property should be valued at its historical cost. Therefore, the M property factor can be calculated as follows:
M Property Factor = (Average value of property in State M / Average value of all property) x 100%
The average value of all property is based on the historical cost of the property, which is not given in the problem. Therefore, we cannot calculate the exact property factor. However, we can estimate it based on the information given. 
Since the net depreciated book value is generally lower than the historical cost, the inclusion of property at its net depreciated book value will result in a lower property factor compared to using historical cost. Therefore, we can assume that the property factor for State O will be lower than the property factor for State M. 
Based on the answer choices provided, the closest estimate for the M property factor is 64.9%. Therefore, the answer is C.

Bert Corporation, a Calendar-Year Taxpayer, Owns Property in States M