Question
Bill, a single taxpayer, sells his principal residence in the current year for $300,000. He bought the residence 20 years ago for $105,000 and has
Bill, a single taxpayer, sells his principal residence in the current year for $300,000. He bought the residence 20 years ago for $105,000 and has lived in it since.
What is the correct tax treatment for this gain?
Question options:
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| He has a realized gain of $195,000 but it is not recognized because it is excluded |
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| He has a realized gain of $195,000 but he may defer recognition of that gain by purchasing a replacement home for at least $300,000. |
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| none of the above |
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Advanced Accounting
Authors: Joe Ben Hoyle, Thomas Schaefer, Timothy Doupnik
14th Edition
1260247821, 978-1260247824
