Larry inherited a beachfront house from your father Gerry. Gerry bought it in 1956 for $96,000; nevertheless, the BPO as of 12/3/20, was $1,236,000. On 2/1/21, after Larry sold his primary residence on 1/31/21, he moved into the inherited house and started using it as his primary residence. Nevertheless, on 11/28/21, he sold the inherited house for $1,325,000 and incurred the following selling expenses: realtor commission of 6% of the sales price of the home, transfer tax of $2,500, state filing fee of $150, and $8650 for property taxes (from 2/1/21 to 11/28/21). What is Larry's gain on the sale of the inherited property? What is his taxable income and income tax assuming Larry has a capital gains rate of 20%?

Answer rating: 100% (QA)

To calculate Larrys gain on the sale of the inherited property we need to determine the adjusted bas... View the full answer