Aaron and Melissa are looking to sell their house for $700,000. They purchased the house seven years ago for $480,000 and didn't have any adjustments to factor in. If Aaron and Melissa sell their house for $700,000, how much will they have to pay in capital gains?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Aaron and Melissa are looking to sell their house for $700,000. They purchased the house seven years
ago for $480,000 and didn't have any adjustments to factor in. If Aaron and Melissa sell their house for
$700,000, how much will they have to pay in capital gains?
O $700,000. Married couples are required to pay capital gains on the final sales price.
O $220,000. All sellers have to pay capital gains on the sales price minus the price they originally paid.
O $0. The $500,000 capital gains exclusion will allow them to write off any profits earned on the property.
$0. Capital gains is only paid on commercial properties.
Transcribed Image Text:Aaron and Melissa are looking to sell their house for $700,000. They purchased the house seven years ago for $480,000 and didn't have any adjustments to factor in. If Aaron and Melissa sell their house for $700,000, how much will they have to pay in capital gains? O $700,000. Married couples are required to pay capital gains on the final sales price. O $220,000. All sellers have to pay capital gains on the sales price minus the price they originally paid. O $0. The $500,000 capital gains exclusion will allow them to write off any profits earned on the property. $0. Capital gains is only paid on commercial properties.
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