Answered

Looking for answers? Westonci.ca is your go-to Q&A platform, offering quick, trustworthy responses from a community of experts. Join our Q&A platform and connect with professionals ready to provide precise answers to your questions in various areas. Get quick and reliable solutions to your questions from a community of experienced experts on our platform.

Sue, a single taxpayer, purchased a principal residence in 2009 for $415,000. In 2012, she paid $18,000 to add a sunroom. This year, Sue sold the residence for $686,000. Her selling expenses were $5,000. How much gain must Sue recognize on the sale

Sagot :

bharathparasad577

Sue must recognize the gain of $0 on the sale. Let's see how.

Lets calculate the gain on the sale of the residence.

Gain = Selling Price+ selling expenditure- Cost basis

        = 686000-5000- 433000

        = $ 248,000

Cost Basis = Cost+ Improvements

                  = 415000+ 18000

                  =$ 433000

Lets discuss the gain to be recognized now.

According to the IRS publication 523, the gain from the sale of main home upto $250,000 are not included in income. Moreover, Sue has kept the house for more than 24 months. Here, the gain is $248,000 which is below the amount of $250,000.

Hence, the entire gain is excluded.

So, Sue has to recognize $0 on the sale.

To learn more about gain, refer: https://brainly.com/question/1153322

#SPJ4

Thanks for using our platform. We're always here to provide accurate and up-to-date answers to all your queries. Thanks for stopping by. We strive to provide the best answers for all your questions. See you again soon. Westonci.ca is your go-to source for reliable answers. Return soon for more expert insights.