Mr. and Mrs. Snell own and live in a house, with an adjusted basis of $300,000, that

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Mr. and Mrs. Snell own and live in a house, with an adjusted basis of $300,000, that was purchased in 1998. The house is destroyed by a tornado on March 10 of the current year, and the Snells receive insurance proceeds of $410,000. They purchase another residence for $480,000 four months later.
a. May they exclude the $110,000 gain, and if so, what is the basis of the residence purchased in July?
b. May they defer the $110,000 gain, and if so, what is the basis of the residence purchased in July?

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Pearsons Federal Taxation 2023 Comprehensive

ISBN: 9780137840656

36th Edition

Authors: Timothy J. Rupert, Kenneth E. Anderson, David S Hulse

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