Question

1. Brian bought a house 15 years ago for $120,000 as his principal residence. He paid 10%

down payment. What was the amount of equity on his home at that time?

2. Brian’s home is worth $450,000 now and his mortgage balance is $50,000. What is the

amount of equity on his home?

3. Brian paid $14,700 in mortgage interest, $6,300 in mortgage principal and $4,500 in

property tax. He is in the 35% tax bracket. What’s his income tax savings?

4. Brian bought a house 30 years ago with $275,000 as his principal residence. He sold the

house for $620,000 this year and paid $31,000 for commission. His income tax bracket is

33% and long-term capital gain tax is 15%. How much should he pay for capital gain tax?

Answer #1

1. Equity of house at the time of purchase is nothing but the down payment value...

Therefore , equity of brain's house 15 years ago would be $120000*10% .

I.e, $12000

2 . Equity of house at present is the difference between current market value less

Mortgage balance ... i.e, $450000-$50000= $400000

3. The interest paid for mortgage is tax deductible while principal is not...

Hence ,the amount of tax savings would be the amount of tax reduced due to interest deduction ... Hence tax savings would be $14700×35%

4. Capital gain= sale value of house - indexed value of cost of purchase

But the year of purchase of property is not given in the question to calculate indexed value of purchase.

Further , the amount of capital gain tax would be

• [capital gain - commission( considering it to be tax deductible) ] × 15%

H bought his home 10 years ago and has used it as his principal
residence since that time. H married W on July 1,2016. Although W
does not have an ownership interest in his home,she has used it as
her principal residence since the couple's marriage. H sells the
home on August 1,2017, realizing a gain of $400,000. H and W can
claim a_ home sale exclusion. A) $200,000 B) $250,000 C) $400,000
D) $500,000

gene owns his own home, which he bought several years ago. his
original mortgage which was used to buy the house is $150,000, in
the current year, he obtains a home equity loan on the house of
$90,000. the interest on the original mortgage is $15,000 and on
the new loan is $10,000. the fair market value of the house is
$325,000. how much of this interest is deductible as qualified
residence interest
a 0
b $10,000
c $15,000
d...

1. Charlie bought his house 15 years ago, he is borrowed
$200,000 with a 30-year mortgage with a 6.0% APR. His mortgage
broker has offered him a 15-year mortgage with a 4¾% APR with 3
points closing costs. Should Charlie refinance if he plans to live
in the house for 10 more years?
21. Suzie owns a municipal bond that pays 5% interest annually
and her average tax rate is 23% and his marginal tax rate is 40%.
What is...

Brandon bought a home exactly 15 years ago. He financed $210,000
at 4.8% over 30 years. His monthly payment is $1,101.80. Calculate
Brandon's current mortgage balance.
Round to nearest dollar and do NOT use a dollar sign.

Adam and Tori got married and bought a house 15 months ago.
Tori’s job recently transferred her to an office in a different
state, so Adam and Tori sold their house. What is the maximum
amount of gain from the sale of the personal residence that Adam
and Tori can exclude from income taxation?
$0
$250,000.
$312,500.
$500,000.

Magnum is single. He has some stock that he bought for $5.00
many years ago which is now worth $30,000, and he would like to
sell it. He has no other capital gains or losses. It is Nov 30,
2018. Magnum will have taxable income of $150,000 in 2018 (before
this capital gain). He anticipates having taxable income of
$450,000 (before this capital gain) and no other possible capital
gains or losses in 2019. What might be a good end...

One year ago you bought a $1,000,000 house partly funded using a
mortgage loan. The loan size was $800,000 and the other $200,000
was your wealth or 'equity' in the house asset. The interest rate
on the home loan was 4% pa. Over the year, the house produced a net
rental yield of 2% pa and a capital gain of 2.5% pa. Assume that
all cash flows (interest payments and net rental payments) were
paid and received at the end...

15. Ed's daughter, Gladys, transferred the ownership of her
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for the house 15 years earlier. When she gifted the house to Ed, it
was valued at $75,000. Ed died this year and left everything he
owned to Gladys, including the house she originally gifted to him.
At Ed's death in 2018, the house had a fair market value of
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22. Michael (single) purchased his home on July
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amount of the gain is Michael allowed to exclude from his 2017
gross income?
MULTIPLE CHOICE
$0
$225,000
$250,000
$305,000
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a. 10; 20
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d. 25; 28
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