Question

13. TSU sold her ho me in Houston. TSU and her ex-husband purchased the home four years ago for and TSU received the house in the divorce settlement and lived there until she moved to Fifth Ward in January. TSU sold the home for $ 550,000. How much taxable gain does TSU reco a. $150,000 b. $250,000 c. The sales price minus real estate commissions gnize on the sale of the home? d. $O

Answer 1

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Answer is highlighted in yellow: Solution d. $0 Answer: Explanation: Both couple purchased the home at $400,000 four year ago. The divorce decree settlement will be considered as home has been gifted to wife, and entire basis will be the basis of TSU or wife. Therefore, Gain recognized on the sale of home. Therefore, Sale price Less: adjusted basis Gain realized Less: Exclusion maximum $250000 Taxable Gain 550000 400000 150000 150000 0