You currently work for OshenBreece CPA, PLLC.

The Managing Partner at OshenBreece, Dena (Slay) Breece CPA recently assigned you to a new client in your office, Mary, and Christine Sims. Mary and Christine are married and purchased a home in Wagram, North Carolina for $300,000. They moved into the house on January 15th, 2018. They lived in the home until December 15th of 2019, when they purchased a new home and rented out the original home.

Mary and Christine are currently considering their options regarding selling the first house. According to their realtor, they should be able to sell it for $550,000. The realtor estimated the selling expenses to be $25,000. They have asked for your assistance and recommendations regarding this. They are concerned regarding the tax implications. They are currently 15% tax bracket for capital gains.

Mary and Christine were able to make a decent amount of profit when they rented out their home and did not take any depreciation expense when renting their home.

Dena has asked that you answer by writing a letter to the Sims for approval prior to your meeting with the clients.