Nicki is single and 46 years old. She sells her principal residence (adjusted ba

Question

Nicki is single and 46 years old. She sells her principal residence (adjusted basis $200,000) that she purchased ten years ago for $435,000.

a.   What is the amount of Nicki's recognized gain on the sale?

b.   Assume instead that Nicki sells the residence for $485,000. What is the amount of Nicki's recognized gain on the sale?

c.   Assume instead that Nicki has been married to Mike for the entire time they have owned and lived in the home. If they sell the home for $485,000, what is the amount of their recognized gain on the sale?

Explanation / Answer

Solution:

(A). She Loss the 2,35,000

Note: If incase in this house Value have some Depreciation. But in the Problem Depreciation no mention. So there is no Depreciation.

Than she Loss =2,35,00

(B). She Gain the 2,35,000

Note: In this Problem there is no Depreciation. So she gain on Residence 2,35,000

(C). She gain Profit 2,35,000

She Gain Profit because there is no Depreciatiion.

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