Question

The following information applies to the questions displayed below.] Troy (single) purchased a home in Hopkinton, Massachusetts, on January 1, 2007, for $300,000. He sold the home on January 1, 2019, for $320,000. How much gain must Troy recognize on his home sale in each of the following alternative situations? (Leave no answer blank. Enter zero if applicable.) Problem 14-44 Part a a. Troy rented the home out from January 1, 2007, through November 30, 2008. He lived in the home as his principal residence from December 1, 2008, through the date of sale. Assume accumulated depreciation on the home at the time of sale was $7,000. What is the recognized gain?

Answer 1

IT IS GIVEN THAT THE ACCUMULATED DEPRECIATION AMOUNTED TO $7000

SO DEDUCT THIS AMOUNT FROM THE ORIGINAL COST OF ASSET

              $300000-$7000= $293000 IS THE ORIGINAL COST OF ASSET

IN THIS QUESTION IT IS MENTIONED THAT TROY RENTED OUT THE HOUSE FOR 23 MONTHS ....BUT THE MONTHLY RENTAL DETAILS NOT FURNISHED HERE.

SO MONTHLY RENT RECEIVED FOR HIM ALSO CONSTITUTE A PART OF HIS GAIN.

APART FROM MONTHLY RENT , THE RECOGNIZED GAIN OF TROY WOULD BE

$320000-$293000= $27000

SO $27000+ 23 MONTHS MONTHLY RENTAL CONSTITUTE HIS INCOME

THANK YOU

IF THE A