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Hello, Please help, My answers are below, please review and not correct, kind correct those. thank you. Steve and Stephanie Pratt purchased a home in

Hello, Please help,

My answers are below, please review and not correct, kind correct those. thank you.

Steve and Stephanie Pratt purchased a home in Spokane, Washington, for $400,000. They moved into the home on February 1 of year 1. They lived in the home as their primary residence until June 30 of year 5, when they sold the home for $700,000. (Leave no answer blank. Enter zero if applicable.)

a. What amount of gain on the sale of the home are the Pratts required to include in taxable income?

Recognized gain $0.00 ____________

Steve and Stephanie Pratt purchased a home in Spokane, Washington, for $400,000. They moved into the home on February 1 of year 1. They lived in the home as their primary residence until November 1 of year 1, when they sold the home for $500,000. The Pratts marginal ordinary tax rate is 35 percent. (Leave no answer blank. Enter zero if applicable.)

  1. a-1. Assume that the Pratts sold their home and moved because they didnt like their neighbors. How much gain will the Pratts recognize on their home sale?
  2. a-2. At what rate, if any, will the gain be taxed?

1 a- Recognized gain $100,000

2 b- Tax rate: 35%

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