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please answer part 2 as 2nd picture has answered part 1 please. Part 1 Caroline Karimaghava purchased the residence on March 23, 1997, for $129,400

please answer part 2 as 2nd picture has answered part 1 please. image text in transcribed
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Part 1 Caroline Karimaghava purchased the residence on March 23, 1997, for $129,400 and improve- ments totaling $5,700 since. The original loan has a balance as of January 1, 2020 of $95,200 (principal payments for 2020 are $750) and bears interest at 4 percent. Property taxes for 2020 are $3,400. Caroline's other income and expenses for 2020 are these: Salaries and wages $140,800 State income taxes 6,400 State car tax 225 State sales tax 4,220 Other itemized deductions 3,100 Calculate Caroline's after-tax cost of owning the residence for 2020. Assume that Caroline's marginal tx bracket is 22%. Part 2 Caroline Karimaghaya from Part 1 sold her principal residence March 16, 2020, for $435,000. Related to the sale, Caroline paid the following: Sales commissions $13,325 Title transfer, legal, etc. Prepayment penalty on loan 1,220 Painting and other cleanup (January 19) 450 The buyer paid Caroline $256 for property taxes she had paid which were allocable to the period after the sale. Caroline replaced the residence on January 22, 2021. She paid $258,000 and made other payments at closing as follows: Points on new mortgage $ 800 Closing costs 330 Property tax reimbursement to seller 560 Calculate Caroline's gain realized and gain recognized on the sale. 225 After-tax interest on house-loan (195200*4%)-750)*(1-22%)= 2385.24 After-tax property taxes (3400*(1-22%))= 2652 Depreciation tax shield (129400+5700)*3.636%*22%= -1080.69 After-tax cost of owning the residence for 2020 3956.55 Part 1 Caroline Karimaghava purchased the residence on March 23, 1997, for $129,400 and improve- ments totaling $5,700 since. The original loan has a balance as of January 1, 2020 of $95,200 (principal payments for 2020 are $750) and bears interest at 4 percent. Property taxes for 2020 are $3,400. Caroline's other income and expenses for 2020 are these: Salaries and wages $140,800 State income taxes 6,400 State car tax 225 State sales tax 4,220 Other itemized deductions 3,100 Calculate Caroline's after-tax cost of owning the residence for 2020. Assume that Caroline's marginal tx bracket is 22%. Part 2 Caroline Karimaghaya from Part 1 sold her principal residence March 16, 2020, for $435,000. Related to the sale, Caroline paid the following: Sales commissions $13,325 Title transfer, legal, etc. Prepayment penalty on loan 1,220 Painting and other cleanup (January 19) 450 The buyer paid Caroline $256 for property taxes she had paid which were allocable to the period after the sale. Caroline replaced the residence on January 22, 2021. She paid $258,000 and made other payments at closing as follows: Points on new mortgage $ 800 Closing costs 330 Property tax reimbursement to seller 560 Calculate Caroline's gain realized and gain recognized on the sale. 225 After-tax interest on house-loan (195200*4%)-750)*(1-22%)= 2385.24 After-tax property taxes (3400*(1-22%))= 2652 Depreciation tax shield (129400+5700)*3.636%*22%= -1080.69 After-tax cost of owning the residence for 2020 3956.55

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