Q.10 John, a single taxpayer, sold his 2-family home, which he owned since June 10, 2007 for $850,000. During the time John owned the home, he lived in one apartment and rented the second apartment. Both apartments were of equal size. John purchased the home for $200,000. John made no improvements to the home, but he took depreciation expense every year on the rental unit. Total depreciation allowed was $61,820; however, total allowable depreciation was $77, 275. What is John’s realized gain on the sale of the home? What is John’s recognized gain? Explain your answer.
Q.10 John, a single taxpayer, sold his 2-family home, which he owned since June 10, 2007 for $850,000. During the time John owned the home, he lived in one apartment and rented the second apartment. Both apartments were of equal size. John purchased the home for $200,000. John made no improvements to the home, but he took
What is John’s realized gain on the sale of the home?
What is John’s recognized gain? Explain your answer.
Q.11 On November 03, 2017, Tim sold 1,000 shares of Citigroup stock (adjusted basis $45,000) for $28,000. On December 01, 2017, Tim purchased 1,200 share of Citigroup stock for $$27,500.
What is Tim’s recognized loss for 2017? Explain your Answer.
Q.12 Nancy, a single taxpayer paid $18,000 in medical expenses in 2016. Her AGI in 2016 was $100,000. Nancy filed a claim for reimbursement of medical expenses with her insurance company in 2016 but did not receive reimbursement until May 15, 2017. Nancy paid no other expenses in 2016.
Assuming medical expenses have a 10% floor and the standard deduction in 2016 is $6,300, how much of the medical expense reimbursement must Nancy include in gross in 2017 if she receives a reimbursement of $18,000? Explain your answer.
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