Lewis, a single taxpayer, purchased a principal residence in 2005 for $240,000.
ID: 2530838 • Letter: L
Question
Lewis, a single taxpayer, purchased a principal residence in 2005 for $240,000. He lived in the house from May 2005 until March 2014. He put the house up for sale in August 2014. However, due to a slow real estate market the house did not sell until February 2015.
In February 2015, he sold the house for $266,000. He paid real estate commissions to Century 21 of $7,000 to get the property sold.
How much gain must he recognize on his 2015 Federal tax return for this sale?
$0
$19,000
$26,000
$266,000
$0
$19,000
$26,000
$266,000
Explanation / Answer
The gain from the sale of your primary residence is calculated by deducting the selling expenses and the adjusted basis of the house.
Net Gain must be Recognise on Federal Tax return for Sale of Property is $19,000
The gain from the sale of your primary residence is calculated by deducting the selling expenses and the adjusted basis of the house.
Net Gain must be Recognise on Federal Tax return for Sale of Property is $19,000
Selling Price $266,000 Purchase Price $240,000 Gain on Sale of Asset $26,000 Real estate commission Paid $7,000 Net gain should be recognize @ Federal Return $19,000Related Questions
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