On February 1, 2021, Stephen (who is single) sold his principal residence (home 1) at a $100,000 gain. He was able to exclude the entire gain on his 2021 tax return. Stephen purchased and moved into home 2 on the same day. Assuming Stephen lives in home 2 as his principal residence until he sells it, which of the following statements is true? Under no circumstances will Stephen be allowed to exclude gain on home 2 if he sells home 2 in 2022. O Stephen will be eligible to exclude gain on home 2 only if he waits until 2026 to sell it. In certain circumstances, Stephen may be able to exclude gain on home 2 even if he sells home 2 in 2021. None of the choices are correct.
On February 1, 2021, Stephen (who is single) sold his principal residence (home 1) at a $100,000 gain. He was able to exclude the entire gain on his 2021 tax return. Stephen purchased and moved into home 2 on the same day. Assuming Stephen lives in home 2 as his principal residence until he sells it, which of the following statements is true? Under no circumstances will Stephen be allowed to exclude gain on home 2 if he sells home 2 in 2022. O Stephen will be eligible to exclude gain on home 2 only if he waits until 2026 to sell it. In certain circumstances, Stephen may be able to exclude gain on home 2 even if he sells home 2 in 2021. None of the choices are correct.
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 69P
Related questions
Question
11.
Transcribed Image Text:On February 1, 2021, Stephen (who is single) sold his principal residence (home 1) at a $100,000 gain. He was able to exclude the entire gain on his 2021 tax
return. Stephen purchased and moved into home 2 on the same day. Assuming Stephen lives in home 2 as his principal residence until he sells it, which of the
following statements is true?
Under no circumstances will Stephen be allowed to exclude gain on home 2 if he sells home 2 in 2022.
Stephen will be eligible to exclude gain on home 2 only if he waits until 2026 to sell it.
In certain circumstances, Stephen may be able to exclude gain on home 2 even if he sells home 2 in 2021.
None of the choices are correct.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT