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Problem $10-29($LO$.3)$

Veronica is a key employee of Perdiz Corporation, an aerospace engineering concern located in Seattle. Perdiz would like to establish an office on the east coast of Florida and wants Veronica to be in charge of the branch. Veronica is hesitant about making the move because she fears she will have to sell her residence in Seattle at a loss. Perdiz buys the house from Veronica for $$420,000,$ its cost to her. She has owned and occupied the house as her principal residence for eight years. One year later, Perdiz resells the property for $$370,000.$ Nothing regarding the sale of the residence is ever reflected on Veronica's income tax returns. Perdiz absorbs all of Veronica's moving expenses.

Indicate whether the following are "True" or "False" regarding the tax issues associated with this situation.

a$.$To the extent that Perdiz is paying for Veronica's qualified moving expenses, Veronica can exclude this amount from her gross income.$$

TrueFalse

b$.$If the fair market value of the house is actually $$420,000$ when she sells it to Perdiz, then she would use this amount in calculating her recognized gain, if any, on the sale under $121.$

TrueFalse

c$.$If the fair market value of the house is actually $$370,000$ when she sells it to Perdiz, and she has a realized loss, none of it can be recognized.