Answered

Westonci.ca makes finding answers easy, with a community of experts ready to provide you with the information you seek. Connect with a community of experts ready to provide precise solutions to your questions quickly and accurately. Get precise and detailed answers to your questions from a knowledgeable community of experts on our Q&A platform.

Sal bought a personal residence for $150,000. He made $150,000 of improvements during the three years he lived in it before he sold it. He sold the home for $750,000 and paid $50,000 in selling expenses, including the broker's commission. On what amount will he pay capital gains tax

Sagot :

Answer: $150,000

Explanation:

It should be noted that when an individual sells a personal residence, there's an exclusion of $250,000 on th capital gains tax.

Therefore, the amount that will be paid for capital gain tax will be:

Sales price = $750,000

Less: Cost price = $150,000

Less: Improvements = $150,000

Less: Selling expenses = $50,000

Less: Exclusion = $250,000

Capital gain tax = $150,000

Based on the above calculation, the capital gain tax is $150,000.

We appreciate your visit. Hopefully, the answers you found were beneficial. Don't hesitate to come back for more information. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. We're glad you visited Westonci.ca. Return anytime for updated answers from our knowledgeable team.