1. Ten blocks away from the Aunt Millies and Uncle Joes home, there was a beautiful home owned by Carol and Ted Brown. They purchased their home for $5000 on the same date as Aunt Millie and Uncle Joe. Fast forward thirty years when the Browns home was worth $1,800,000. Fast forward to April 15^th, 2023, when the house was condemned via the citys claim for eminent domain. The city offered the Browns $$1,300,000.
2. What is the cost basis of the Browns home on the date of their purchase? 5,000
3. What is the value of the house upon condemnation? 1, 300,000
4. What are the tax consequences for the Browns?