Michael and Mary Mason sold for $380,000 in November of 2012 their residence that they had purchased

Question:

Michael and Mary Mason sold for $380,000 in November of 2012 their residence that they had purchased in 2002 for $75,000. They made major capital improvements during their 10-year ownership totaling $25,000.
(a) What is their excluded gain? How much must they recognize?
(b) Suppose, instead, that the Masons sold their home for $720,000. They moved into a smaller house costing $220,000. What is their excluded gain? How much must they recognize? (Points: 17)

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a The Masons basis of the residence at the time of sale is 1000...View the full answer

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