8. (TCO 6) During 2011, taxpayers decided to sell their residence, which had a b

Question

8. (TCO 6) During 2011, taxpayers decided to sell their residence, which had a basis of $350,000. They had owned and occupied the residence for 8 years. To make it more attractive to prospective buyers, they had it painted in April at a cost of $5,000 and paid for the work immediately. They sold the house in May for $500,000. Broker's commissions and other selling expenses amounted to $30,000. They purchased a new residence in June for $250,000. What is the realized gain? (Points : 5) $150,000 $120,000 $115,000 $0 None of the above 9. (TCO 6) Terron gives her son stock with a basis in her hands of $225,000 and a fair market value of $180,000. No gift tax is paid. Her son subsequently sells the stock for $190,000. What is his recognized gain or loss? (Points : 5) $0 ($45,000) ($35,000) $10,000 None of the above

Explanation / Answer

Hi, If you like my answer rate me lifesaver first...that way only I can earn points. Thanks 8. The realized gain = $500000 - 30000 -5000 - 350000 = $115,000 9. Recognized loss = $225000 - 190000 = $35000

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