[Topsya]

Janine and Scott moved into their current house in Year One. It was the first house that they had ever owned and they held it until it was sold in February of Year Four. It had a tax basis of $200,000 but was sold for $460,000. In November of that same year, they buy a new house 63 miles away for $290,000. What impact does the selling of their personal residence have on their taxable income for Year Four?

A Zero

B $90,000 gain

C $170,000 gain

D $260,000 gain

Thanks!

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Only Reg Left]

I'm assuming they're MFJ which gives them a $500,000 exclusion on the $260,000 realized gain, so the answer would be zero.

This was their first house and they held it for over 2 years as their principal residence. They have to live in that new house for 2 years before applying the exclusion again.

AUD - 68, 77
REG - 84* (Expired)
FAR - 83
BEC - 74, 74, 72, 72, 84

[Only Reg Left]

I'm assuming they're MFJ which gives them a $500,000 exclusion on the $260,000 realized gain, so the answer would be zero.

This was their first house and they held it for over 2 years as their principal residence. They have to live in that new house for 2 years before applying the exclusion again.

AUD - 68, 77
REG - 84* (Expired)
FAR - 83
BEC - 74, 74, 72, 72, 84

[Topsya]

Thanks @Only Reg Left!

I though they would need to OWN it for 5 years?

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Topsya]

Thanks @Only Reg Left!

I though they would need to OWN it for 5 years?

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Only Reg Left]

The rule is principal residence for 2 of the past 5 years. They lived in it for 4 years over a 4 year period, so that rule doesn't apply. A lot of these people have vacation homes or rentals and try to take exclusions when selling.

AUD - 68, 77
REG - 84* (Expired)
FAR - 83
BEC - 74, 74, 72, 72, 84

[Only Reg Left]

The rule is principal residence for 2 of the past 5 years. They lived in it for 4 years over a 4 year period, so that rule doesn't apply. A lot of these people have vacation homes or rentals and try to take exclusions when selling.

AUD - 68, 77
REG - 84* (Expired)
FAR - 83
BEC - 74, 74, 72, 72, 84

[Topsya]

ohhhh i see

Thanks a bunch!

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Topsya]

ohhhh i see

Thanks a bunch!

AUD - 90
FAR - 83
BEC - 81
REG - 80
ETHICS - 100

[Author]

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