Problem 2-29

As part of the property settlement related to their divorce, Cindy must give Allen the house that they have been living in, while she gets 100 percent of their savings accounts. The house was purchased for $90,000 20 years ago in Southern California and is now worth $700,000.

A.How much gain must Cindy recognize on the transfer of the house to Allen? $

B. What is Allen's tax basis in the house for calculating tax on any future sale of the house? $