Mr. Low owned two homes from 2020 to 2022. He had purchased Home A in 2008 for $300,000. In 2020, he purchased Home B for $600,000, with the intention of selling Home A immediately. Due to market conditions, mortgage rates, and the asking price, he was unable to sell Home A until 2022. The proceeds received on the sale of Home A were $600,000. In 2023, he was transferred to a different city and sold Home B. He designated 2020 and 2021 to Home A when it was sold. The proceeds received on the sale of Home B were $800,000. What is his taxable capital gain on Home B? [Hint: B-owned 4 & principle 2]
Mr. Low owned two homes from 2020 to 2022. He had purchased Home A in 2008 for $300,000. In 2020, he purchased Home B for $600,000, with the intention of selling Home A immediately. Due to market conditions, mortgage rates, and the asking price, he was unable to sell Home A until 2022. The proceeds received on the sale of Home A were $600,000. In 2023, he was transferred to a different city and sold Home B. He designated 2020 and 2021 to Home A when it was sold. The proceeds received on the sale of Home B were $800,000. What is his taxable capital gain on Home B? [Hint: B-owned 4 & principle 2]
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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7
![Mr. Low owned two homes from 2020 to 2022. He had purchased Home A in
2008 for $300,000. In 2020, he purchased Home B for $600,000, with the intention
of selling Home A immediately. Due to market conditions, mortgage rates, and
the asking price, he was unable to sell Home A until 2022. The proceeds received
on the sale of Home A were $600,000. In 2023, he was transferred to a different
city and sold Home B. He designated 2020 and 2021 to Home A when it was
sold. The proceeds received on the sale of Home B were $800,000. What is his
taxable capital gain on Home B? [Hint: B-owned 4 & principle 2]
a) $75,000.
b) S Nil.
c) $ 25,000.
d) $100,000.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F18972559-ac4a-4f97-9f96-396cc25c9e9b%2Fb361ad18-63d8-4049-b719-1c13ece2c87b%2F0obdacf_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Mr. Low owned two homes from 2020 to 2022. He had purchased Home A in
2008 for $300,000. In 2020, he purchased Home B for $600,000, with the intention
of selling Home A immediately. Due to market conditions, mortgage rates, and
the asking price, he was unable to sell Home A until 2022. The proceeds received
on the sale of Home A were $600,000. In 2023, he was transferred to a different
city and sold Home B. He designated 2020 and 2021 to Home A when it was
sold. The proceeds received on the sale of Home B were $800,000. What is his
taxable capital gain on Home B? [Hint: B-owned 4 & principle 2]
a) $75,000.
b) S Nil.
c) $ 25,000.
d) $100,000.
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