In 2013 due to some unknown reasons, he demolished the house and constructed house on the same lot. The house was completed in 2014 and decided not to stay in the same house. He sold the house in 2014 at gain of $547,000. He excluded gain of $500, 000 (exclusion allowed for MFJ) and paid capital gain on $47,000. He was audited for 2014 and IRS had a different idea. why?
In 2013 due to some unknown reasons, he demolished the house and constructed house on the same lot. The house was completed in 2014 and decided not to stay in the same house. He sold the house in 2014 at gain of $547,000. He excluded gain of $500, 000 (exclusion allowed for MFJ) and paid capital gain on $47,000. He was audited for 2014 and IRS had a different idea. why?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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In 2013 due to some unknown reasons, he demolished the house and constructed house on the same lot. The house was completed in 2014 and decided not to stay in the same house. He sold the house in 2014 at gain of $547,000. He excluded gain of $500, 000 (exclusion allowed for MFJ) and paid
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Capital gain
Capital gain is defined as the increase in the worth of the capital asset or profit earned through the sale of capital asset. The capital gain can be either short term in nature or long term.
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