At the end of 2009, Mr. Vaughn sold both his city home and his summer cottage. Every
Question:
At the end of 2009, Mr. Vaughn sold both his city home and his summer cottage. Every year he has spent at least a portion of the year living in each of the two locations. When he is not residing in these properties they are left vacant. Relevant information on the two properties is as follows:
City Home Cottage
Date acquired 1993 1993
Cost $264,000 $36,000
Gross proceeds from sale 528,000 330,000
Real estate commissions 32,000 16,000
Mr. Vaughn wishes to minimize any capital gains resulting from the sale of the two properties.
Required:
Describe how the residences should be designated in order to accomplish Mr. Vaughan’s goal. In addition, calculate the amount of the gain that would arise under the designation that you have recommended.
Chemistry The Central Science
ISBN: 978-0321696724
12th edition
Authors: Theodore Brown, Eugene LeMay, Bruce Bursten, Catherine Murphy, Patrick Woodward