On August 8, 2018, Sam, single, age 62, sold for $210,000 his principal residence, which he has lived in for 10 years, and which had an adjusted basis of $60,000. On November 1, 2018, he purchased a new residence for $80,000. For 2018, Sam should recognize a gain on the sale of his residence of:

Question

Mathematics

Alexandria Reynolds

27 June, 04:02

On August 8, 2018, Sam, single, age 62, sold for $210,000 his principal residence, which he has lived in for 10 years, and which had an adjusted basis of $60,000. On November 1, 2018, he purchased a new residence for $80,000. For 2018, Sam should recognize a gain on the sale of his residence of:

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Cornelius Ware · Answer 1

Profit of $130,000

Step-by-step explanation:

property is sold at $210,000

then he purchased a new residence for $80,000

the recognized gain on the sail of his residence is equal to

= $210,000 - $80,000

= $130,000

hence the owner has the profit of $130,000 on the sale of his residence.