Mr. and Mrs. Alvarez paid $130,000 for their home 30 years ago. They recently sold this...
Mr. and Mrs. Alvarez paid $130,000 for their home 30 years ago. They recently sold this home and moved into a rented apartment. Describe the tax consequences of the sale assuming that the amount realized was:
A.$125,000
B.$450,000
C.$850,000
Homework Answers
| A | Loss realized 5,000 (125,000-130,000) and realized 0 |
| B | Gain realized 320,000 (450,000-130,000) and realized 0 |
| C | Gain realized 520,000 and realized 20,000 |
*maximum exclusion = 500,000
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