Chapter 12 Fall 11

Chapter 12 Fall 11 - Burkett Tax I Chapter 12 Sale of...

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Burkett – Tax I – Chapter 12 Sale of Principal Residence/Gain Exclusion Charlie, a single taxpayer sells his home on 08/01 realizing a gain of $300,000. He has owned and used his home as his principal residence for at least 2 of the past 5 years. How much gain must he recognize? What if Charlie had realized a $20K loss? Assume instead that Charlie has used his home as his principal residence for 584 days (1.6 years) of the last 5 years, the reason for the sale is an employment related move and his most recent sale was 3 years ago. 1
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Burkett – Tax I – Chapter 12 Sale of Principal Residence/Gain Exclusion w/ Non Qualified Use Example 1: Assume that an individual buys a property on January 1, 2009, for $400,000, and uses it as rental property for two years claiming $20,000 of depreciation deductions. On January 1, 2011, the taxpayer converts the property to his principal residence. On January 1, 2013, the taxpayer moves out, and the taxpayer sells the property for $700,000 on January 1, 2014. Example 2.—Assume that an individual buys a principal residence on January 1,
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This note was uploaded on 02/22/2012 for the course ACCT 403 taught by Professor White during the Fall '11 term at South Carolina.

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Chapter 12 Fall 11 - Burkett Tax I Chapter 12 Sale of...

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