Asked Mar 25, 2019

Constanza, who is single, sells her current personal residence (adjusted basis of $165,000) for $450,000. She has owned and lived in the house for 30 years. Her selling expenses are $22,500. What is Constanza's realized and recognized again?


Expert Answer

Step 1

Calculate realized gain:

Realized gain = (Current personal residence amount - Selling expenses) - Adjusted basis

Realized gain = ($450,000 - $22,500) -$165,000

Realized gain = $262,500

Step 2


Therefore, Realized gain of Contstanza amount is $262,500.


Step 3

Calculate recognized gain:

Recognized gain = Realized gain - 121 exclusion

Recognized gain = $2...

Want to see the full answer?

See Solution

Check out a sample Q&A here.

Want to see this answer and more?

Solutions are written by subject experts who are available 24/7. Questions are typically answered within 1 hour.*

See Solution
*Response times may vary by subject and question.
Tagged in



Related Accounting Q&A

Find answers to questions asked by student like you
Show more Q&A

Q: There can be three subgroups within the long-term capital gain or loss group – 0%/15%/20%, 25%, and ...

A: Generally,  capital gains are taxed at a rate of 15%. However a 0 % rate can also be applied when th...


Q: I need help solving this, thanks!

A: Break-even sales: Break-even sales is that level of sales at which there is no profit or no loss on ...


Q: Lightning Electronics is a midsize manufacturer of lithium batteries. The company’s payroll records ...

A: An organization's payroll costs not just incorporate the wages paid to the representatives. In the U...


Q: In terms of the tax formula applicable to individual taxpayers, which, if any, of the following stat...

A: Deductions for AGI means above the line deduction which a taxpayer can deduct from his gross income ...


Q: How is income defined by the IRC? For example, suppose you decided to hold a garage sale one fine su...

A: IRC or the Internal Revenue Code is a statutory tax law in the united states for domestic income. Th...


Q: The setting of standard is  a/ a worker decision b/ a management decision c/ a managerial accounting...

A: Setting Standard: Setting standard means establishing the level of performance on the basis of past ...


Q: Late in the year, sofware city began carry WorldCrafter, a new word processing software program. At ...

A: a. 1. Prepare the journal entry to record the write down at December 31.


Q: LO 3,8 Citron, a calendar year taxpayer, began business in January 2017. It had a long-term capital ...

A: Provision of long-term capital gain as an individual. Long-term capital gain of $5,000 in 2017 is ta...


Q: Hills Company’s June 30 bank statement and the June ledger account for cash are summarized here:   ...

A: Prepare a bank reconciliation statement for Hills Company.