6. Consider the following information for Mr. and Mrs. O'Leary, who file a joint return: 5/1/2021:...

 

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6. Consider the following information for Mr. and Mrs. O'Leary, who file a joint return: 5/1/2021: Mr. and Mrs. O'Leary sold their principal residence for $300,000 and used the § 121 exclusion. They had acquired the house in 2000 for $80,000. 5/1/2021-6/30/2021: They rented a hotel room. . . ● ● 7/1/2021: They purchased a new principal residence for $320,000 and moved in. 3/30/2022: Mr. O'Leary's employer transferred him to a new city far away. 4/1/2022: Mr. and Mrs. O'Leary sold their residence (that was purchased on July 1, 2021) for $570,000 and moved out. They paid a realtor's commission of $34,000. One month before putting the house up for sale, they paid $17,000 to paint both the interior and exterior of the house. 4/1/2022-6/30/2022: Mr. and Mrs. O'Leary lived with a relative. 7/1/2022: They purchased a new principal residence for $420,000 and moved in. How much is the realized gain or loss on the sale of the residence in 2022, and the recognized gain or loss on the sale of the residence in 2022? a) $216,000; and $0. b) $536,000; and $36,000. c) $216,000; and $49,333. d) $216,000; and $28,500. e) $216,000; and $216,000. 6. Consider the following information for Mr. and Mrs. O'Leary, who file a joint return: 5/1/2021: Mr. and Mrs. O'Leary sold their principal residence for $300,000 and used the § 121 exclusion. They had acquired the house in 2000 for $80,000. 5/1/2021-6/30/2021: They rented a hotel room. . . ● ● 7/1/2021: They purchased a new principal residence for $320,000 and moved in. 3/30/2022: Mr. O'Leary's employer transferred him to a new city far away. 4/1/2022: Mr. and Mrs. O'Leary sold their residence (that was purchased on July 1, 2021) for $570,000 and moved out. They paid a realtor's commission of $34,000. One month before putting the house up for sale, they paid $17,000 to paint both the interior and exterior of the house. 4/1/2022-6/30/2022: Mr. and Mrs. O'Leary lived with a relative. 7/1/2022: They purchased a new principal residence for $420,000 and moved in. How much is the realized gain or loss on the sale of the residence in 2022, and the recognized gain or loss on the sale of the residence in 2022? a) $216,000; and $0. b) $536,000; and $36,000. c) $216,000; and $49,333. d) $216,000; and $28,500. e) $216,000; and $216,000.

Answer rating: 100% (QA)

The correct answer is C 216000 and 49333 EXPLANATION The realized gain or loss on the sale of the re... View the full answer