On January 5, 2022, Amin sells his principal residence with an adjusted basis of $270,000 for $690,000. He has owned and occupied the residence for 15 years. He pays $35,000 in commissions and $2,000 in legal fees in connection with the sale. One month before the sale, Amin painted the exterior of the house at a cost of $5,000 and repaired various items at a cost of $3,000. On October 15, 2022, Amin purchases a new home for $600,000. On November 15, 2023, he pays $25,000 for completion of a new room on the house, and on January 14, 2024, he pays $15,000 for the construction of a pool. What is the Amin’s recognized gain on the sale of his old principal residence, and what is the basis for the new residence?
On January 5, 2022, Amin sells his principal residence with an adjusted basis of $270,000 for $690,000. He has owned and occupied the residence for 15 years. He pays $35,000 in commissions and $2,000 in legal fees in connection with the sale. One month before the sale, Amin painted the exterior of the house at a cost of $5,000 and repaired various items at a cost of $3,000. On October 15, 2022, Amin purchases a new home for $600,000. On November 15, 2023, he pays $25,000 for completion of a new room on the house, and on January 14, 2024, he pays $15,000 for the construction of a pool. What is the Amin’s recognized gain on the sale of his old principal residence, and what is the basis for the new residence?
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