All tax calculations should be based on the 2020 Tax Rate Schedules. Figures should be rounded to the nearest dollar. Percentages should be rounded to the nearest whole percentage (e.g., 32% instead of 32.2%) Sale of principal residence. Lupe and Gavin, who are married and file jointly, bought a house on January 1, 2012, for $460,000. They used it as a vacation home until January 1, 2016, when they moved into it and used it as their principal residence. (They did not take any depreciation deductions during the time it was a vacation home.) On January 1, 2020, they sold it for $860,000. How much capital gain do they have to report on this sale?
All tax calculations should be based on the 2020 Tax Rate Schedules. Figures should be rounded to the nearest dollar. Percentages should be rounded to the nearest whole percentage (e.g., 32% instead of 32.2%) Sale of principal residence. Lupe and Gavin, who are married and file jointly, bought a house on January 1, 2012, for $460,000. They used it as a vacation home until January 1, 2016, when they moved into it and used it as their principal residence. (They did not take any depreciation deductions during the time it was a vacation home.) On January 1, 2020, they sold it for $860,000. How much capital gain do they have to report on this sale?
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 70P
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Transcribed Image Text:All tax calculations should be based on the 2020 Tax Rate Schedules. Figures should be rounded to the
nearest dollar. Percentages should be rounded to the nearest whole percentage (e.g., 32% instead of
32.2%)
Sale of principal residence. Lupe and Gavin, who are married and file jointly, bought a house on
January 1, 2012, for $460,000. They used it as a vacation home until January 1, 2016, when they moved
into it and used it as their principal residence. (They did not take any depreciation deductions during the
time it was a vacation home.) On January 1, 2020, they sold it for $860,000. How much capital gain do
they have to report on this sale?
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