Consider the following information for Mr. and Mrs. Gomez: On May 26, 2022, they sold their
Question:
Consider the following information for Mr. and Mrs. Gomez:
• On May 26, 2022, they sold their principal residence, acquired in 2003, for \($200,000\).
They paid \($8,000\) of selling expenses. Their basis in the residence was \($70,000\).
• On July 25, 2022, they purchased a new principal residence for \($250,000\).
• On June 2, 2023, Mr. Gomez, a bank officer, is transferred to another bank in the northern part of the state and they vacate their house.
• On July 1, 2023, they purchase a new principal residence for \($420,000\).
• On October 6, 2023, they sell the residence that was purchased on July 25, 2022, for \($520,000.\) They pay \($30,000\) of selling expenses. Determine:
a. realized gain on the sale of the residence in 2022.
b. recognized gain on the sale of the residence in 2022.
c. realized gain on the sale of the residence in 2023.
d. recognized gain on the sale of the residence in 2023.
Step by Step Answer:
Pearsons Federal Taxation 2024 Individuals
ISBN: 9780138238100
37th Edition
Authors: Mitchell Franklin, Luke E. Richardson