On August 5, this year, taxpayer (who is under age 55) sells his principal resid

Question

On August 5, this year, taxpayer (who is under age 55) sells his principal residence with an adjusted basis of $65,000 for $175,000. He pays $10,500 in commissions and $1,200 in legal fees in connection with the sale. One month before the sale, taxpayer painted the house at a cost of $1,500 and repaired various items at a cost of $2,500. On August 15, this year, taxpayer purchases a new home for $125,000. The taxpayer owned the sold principal residence for more than five years and lived in it for more than two years just prior to the sale.

The amount realized on the sale of this house is:

$175,000

$164,500

$163,300

Zero

None of the above

The gain realized on the sale of the above house is:

$98,300

$99,500

$110,000

None of the above

The "adjusted basis" of the old residence for taxpayer is:

$175,000

$163,300

$161,800

$159,300

None of the above

The recognized gain on the sale of the old principal residence is:

Zero

$34,300

$98,300

$50,000

None of the above

The basis of the new residence acquired is:

$54,000

$61,000

$98,300

$125,000

None of the above

$175,000

$164,500

$163,300

Zero

None of the above

Explanation / Answer

Amount realized on the sale of the house is $175000.

The gain realized on the sale of the house is $98300.

The adjusted basis is $175000.

The basis of the new residence acquired id $125000

Related Questions

Navigate

• Browse (All)
• Browse O
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.