On February 1, 2021, Stephen (who is single) sold his principal residence (home 1) at a $100,000 gain. He was able to exclude the entire gain on his 2021 tax return. Stephen purchased and moved into home 2 on the same day. Assuming Stephen lives in home 2 as his principal residence until he sells it, which of the following statements is true? Under no circumstances will Stephen be allowed to exclude gain on home 2 if he sells home 2 in 2022. O Stephen will be eligible to exclude gain on home 2 only if he waits until 2026 to sell it. In certain circumstances, Stephen may be able to exclude gain on home 2 even if he sells home 2 in 2021. None of the choices are correct.
On February 1, 2021, Stephen (who is single) sold his principal residence (home 1) at a $100,000 gain. He was able to exclude the entire gain on his 2021 tax return. Stephen purchased and moved into home 2 on the same day. Assuming Stephen lives in home 2 as his principal residence until he sells it, which of the following statements is true? Under no circumstances will Stephen be allowed to exclude gain on home 2 if he sells home 2 in 2022. O Stephen will be eligible to exclude gain on home 2 only if he waits until 2026 to sell it. In certain circumstances, Stephen may be able to exclude gain on home 2 even if he sells home 2 in 2021. None of the choices are correct.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
11.
Transcribed Image Text:On February 1, 2021, Stephen (who is single) sold his principal residence (home 1) at a $100,000 gain. He was able to exclude the entire gain on his 2021 tax
return. Stephen purchased and moved into home 2 on the same day. Assuming Stephen lives in home 2 as his principal residence until he sells it, which of the
following statements is true?
Under no circumstances will Stephen be allowed to exclude gain on home 2 if he sells home 2 in 2022.
Stephen will be eligible to exclude gain on home 2 only if he waits until 2026 to sell it.
In certain circumstances, Stephen may be able to exclude gain on home 2 even if he sells home 2 in 2021.
None of the choices are correct.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education