Question

46.-50. Robert sold his ranch which was his principal residence during the current taxable year. At...

46.-50. Robert sold his ranch which was his principal residence during the current taxable year. At the date of the sale, the ranch had an adjusted basis of $460,000 and was encumbered by a mortgage of $200,000. The buyer paid him $500,000 in cash, agreed to take the title subject to the $200,000 mortgage, and agreed to pay him $100,000 with interest at 6 percent one year from the date of sale. How much is Robert’s realized gain on the sale?

46. The amount realized is

a.

$500,000
b.

$700,000
c.

$800,000
d.

None of the above.

2 points   

QUESTION 47

  1. The realized gain is

    a.

    $40,000
    b.

    $240,000
    c.

    $340,000
    d.

    $0
    e.

    None of the above.

2 points   

QUESTION 48

  1. The recognized gain, if Robert is married filing a joint return and he and his wife owned and used the ranch as their principal personal residence

    a.

    $40,000
    b.

    $240,000
    c.

    $340,000
    d.

    $0
    e.

    None of the above.

2 points   

QUESTION 49

  1. If a new residence is purchased for 500000, the basis of the new residence for at least 2 years is

    a.

    $500,000
    b.

    $800,000
    c.

    $460,000
    d.

    $0
    e.

    None of the above

2 points   

QUESTION 50

  1. If Robert is legally married to a same-sex partner, the recognized gain, if Robert and his partner owned and used the ranch as their principal personal residence for at least 2 years , is likely

    a.

    $40,000
    b.

    $240,000
    c.

    $340,000
    d.

    $0
    e.

    None of the above.
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Homework Answers

Answer #1

Question 46.

a. $500,000

Reason : The buyer paid him $500,000. Even if the buyer has taken over the mortgage that is not an income.

Question 47.

b. $ 240,000

Reason : The total amount realised from buyer is $ 500,000 & the mortgage amount which need not be paid by him both comes into account in case of gain

Question 48.

a. $40,000

Reason : In case if filled a joint return the mortgage amount will not be treated as an income and gain will be only $40,000

Question 49.

d. $0

Reason : if a property is purchased with in 2 yrs of sale then the gain will be $0

Question 50.

a.40,000

Reason : Here sex is not important and he is legally married or not is the matter..

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