Question

1. Carl sells his principle residence for $200,000; it has an adjusted basis of $150,000. He incurs selling expenses of $20,000 and legal fees of $2,000. He had purchased another residence one month prior to the sale for $380,000. What is the recognized gain or loss and the basis of the replacement residence if Carl elects to forgo (not use) the §121 exclusion (exclusion of gain on the sale of a principal residence)?

2.

Angela exchanges a rental house at the beach with an adjusted basis of $180,000 and a fair market value of $160,000 for a rental house at the mountains with a fair market value of $148,000 and cash of $12,000. What is Angela’s recognized gain or loss?

Group of answer choices

$148,000

($20,000)

$12,000

$0

Answer 1

Hi

Let me know in case you face any issue: