Question

Question 20 through 21 John, a single taxpayer, sold his 2-family home, which he owned since June 10, 2007 for $850,000. During the time John owned the home, he lived in one apartment and rented the second apartment. Both apartments were of equal size. John purchased the home for $200,000. John made no improvements to the home, but he took depreciation expense every year on the rental unit. Total depreciation allowed was $61,820; however, total allowable depreciation was $77, 275.

What is John’s Amount realized?

a. $347,725

b. $757,275

c. $425,000

d. $788,180

e. None of the above

What is John’s recognized gain?

	a.	$363,280
	b.	$175,000
	c.	$347,725
	d.	$477,275
	e.	None of the above

Answer 1