James and his wife, Carla sell their personal residence which they have occupied for three years on November 11th 2020 for a total sum of $800,000. They made renovations in preparation for the sale in the amount of $25,000 and the costs of selling the house were $10,000. Their cost basis in the home was $250,000. On November 30, they occupied a new home that they
James and his wife, Carla sell their personal residence which they have occupied for three years on November 11th 2020 for a total sum of $800,000. They made renovations in preparation for the sale in the amount of $25,000 and the costs of selling the house were $10,000. Their cost basis in the home was $250,000. On November 30, they occupied a new home that they
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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James and his wife, Carla sell their personal residence which they have occupied for three years on November 11th 2020 for a total sum of $800,000. They made renovations in preparation for the sale in the amount of $25,000 and the costs of selling the house were $10,000. Their cost basis in the home was $250,000. On November 30, they occupied a new home that they purchased for $350,000.
Calculate:
(a) their realized gain on the sale of the residence
(b) their recognized gain on the sale
(c) their adjusted basis in the new residence.
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