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?

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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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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