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 $590,000. Assume the Pratts sell the home because Stephanies employer transfers her to an office in Utah. How much gain will the Pratts recognize on their home sale?

Sarah (single) purchased a home on January 1, 2008 for $600,000. She eventually sold the home for $810,000. Sarah used the property as a vacation home through December 31, 2016. She then used the home as her principal residence from January 1, 2017 until she sold it on January 1, 2019.What amount of the gain on the sale does Sarah recognize?

Javier and Anita Sanchez purchased a home on January 1, 2018 for, $500,000 by paying $200,000 down and borrowing the remaining $300,000 with a 6 percent loan secured by the home. The loan requires interest-only payments for the first five years. The Sanchezes would itemize deductions even if they did not have any deductible interest. The Sanchezes marginal tax rate is 32 percent. What is the after-tax cost of the interest expense to the Sanchezes in 2018?