Question
Asked Mar 25, 2019
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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?

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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

Conclusion:

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

 

Step 3

Calculate recognized gain:

Recognized gain = Realized gain - 121 exclusion

Recognized gain = $2...

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