225 450 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 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 Karimazhaya 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. 225 Prepayment penalty on loan 1,220 Painting and ather cleanup (January 19) 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 dealized and gain recognized on the sale. Part 3 Caroline Karimaghava from Part 1, instead of selling her residence, converted it to vacation rental at January 1, 2020. During 2020, Caroline rented the property for 120 days and used it for personal purposes for 30 days. Rental income was $14,400 and the expenses other than those provided in Part 1 are these Commissions paid to renting agent $ 1.440 Operating costs (.e. cleaning maintenance, etc.) 2,222 Calculate Caroline's net rental income that is included in adjusted gross income and her itemized deductions related to this property, assuming that Caroline itemizes for 2020. Part 4 State any assumptions that you made in Parts 1 - 3