Harper has owned and occupied her personal residence (adjusted basis of $220,000) for three years. In June 2018, she sells the residence for $360,000 (selling expenses are $25,000). On the same day as the sale, Harper purchases another house for $400,000. After 11 months, she sells the new house due to a job relocation. The selling price is $500,000 (selling expenses are $20,000). a. What is Harper's recognized gain on the sale of the first residence? b. What is Harper's basis for her second residence? c. What is Harper's recognized gain on the sale of the second residence?
Harper has owned and occupied her personal residence (adjusted basis of $220,000) for three years. In June 2018, she sells the residence for $360,000 (selling expenses are $25,000). On the same day as the sale, Harper purchases another house for $400,000. After 11 months, she sells the new house due to a job relocation. The selling price is $500,000 (selling expenses are $20,000). a. What is Harper's recognized gain on the sale of the first residence? b. What is Harper's basis for her second residence? c. What is Harper's recognized gain on the sale of the second residence?
Chapter12: Nonrecognition Transactions
Section: Chapter Questions
Problem 36P
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Transcribed Image Text:Harper has owned and occupied her personal residence (adjusted basis of
$220,000) for three years. In June 2018, she sells the residence for $360,000
(selling expenses are $25,000). On the same day as the sale, Harper
purchases another house for $400,000. After 11 months, she sells the new
house due to a job relocation. The selling price is $500,000 (selling expenses
are $20,000).
a. What is Harper's recognized gain on the sale of the first residence?
b. What is Harper's basis for her second residence?
c. What is Harper's recognized gain on the sale of the second residence?
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