Derek and Meagan Jacoby recently graduated from State University, and Derek accepted a Job in business consulting while Meagan accepted a job in computer programming. Meagan inhertted $70,000 from her grandfather, who recently passed away. The couple is debating whether they should buy or rent a home. They located a rental home that meets their needs. The monthly rent is $3,300. They also found a three-bedroom home that would cost $340,000 to purchase. The Jacobys could use Meagan's inheritance for a down payment on the home. Thus, they would need to borrow $270,000 to acquire the home. They have the optlon of paying two discount points to recelve a fixed interest rate of 4.50 percent on the loan or paying no points and recelving a fixed interest rate of 5.70 percent for a 30 -year fixed loan. Though anything could happen, the coyple expects to live in the home, for no more than five years before relocating to a different region of the country. Derek and Meagan don't have any school-related debt, so they wil save the $70,000 if they don't purchase a home. Also, consider the following information: - The couple's marginal tax rate is 20 percent. - Regardless of whether they buy or rent, the couple will itemize thelf deductions and have the ability to deduct all of the property taxes from the purchase of a residence. - If they buy, the Jacobys would purchase and move into the home on January 1,2023. - If they buy the home, the property taxes for the year are $4,650. - Disregard loan-related fees not mentioned above. - If the couple does not buy a home, they will put their money into thelr taxable annulty account, where they earn 4.95 percent annual interest. - Assume that all unstated costs are equal between the buy and rent options. Help the Jacobys with their decisions by answering the following questions: Note: Leave no answer blank. Enter zero if applicable. Comprehenslve Problem 14.68 Part d (Algo) Assume that on March 1, 2022, the Jacobys sold their home for $380,000, so that Derek and Meagan could accept job opportunittes in a different state. The Jacobys used the sale proceeds to (i) pay off the $270,000 principal of the mortgage, (2) pay a $10,000 commission to their real estate broker, and (3) make a down payment on a new home in the different state. However, the new home cost only $202,500. Assume they make interest-only payments on the loan. Requirec: d1. What gain or loss do the Jacobys realize and recognize on the sale of their home? d2. What amount of taxes must they poy on the gain, If any? Complete this question by entering your answers in the tabs below
