Question 21 through 22 21. John, a single taxpayer, sold his 2-family home, whic

Question

Question 21 through 22 21. John, a single taxpayer, sold his 2-family home, which he owned since June 10, 2007 for $850,000. During the second apartment. Both apartments were of equa $200,000. John' made no improvements to the h the time John owned the home, he lived in one apartment and rented l size. John purchased the home for John'made no imp n the rental unit. Total depreciation allowed rovements to the home, but he took depreciation expense every year o allowable depreciation was $77, 275. was $61,820; however, total t is John's realized gain on the sale of the home? a. $347,725 b. $425,000 $727,275 $788,180 e. None of the above What is John's recognized gain? a. $363,280

Explanation / Answer

The 121 exclusion can only be used in conjunction with real property that has been held and used as home owners primary residence. It does not apply to second homes, vacation homes, or the property that has been held for rental,investment or use in trade of Bussiness.

Note: Here we are not having the information about the house purchase date.

So we can go with option 4 (850000-61820)=788180

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