Use the following data to determine the sales price of Toby’s principal residence and the realized gain. He is not married. The sale of the old residence qualifies for the § 121 exclusion.
Selling expenses$ 45,000
Recognized gain180,000
Cost of new residence760,000
Adjusted basis of old residence225,000
§ 121 exclusion250,000
What will be an ideal response?
The sale of residence model can be used to calculate the sales price and the realized gain for Toby.?
| Amount realized: | |||
| Sales price | $700,000 | ||
| Less: Selling expenses | (45,000) | $655,000 | |
| Adjusted basis | (225,000) | ||
| Realized gain | $430,000 | ||
| § 121 exclusion | (250,000) | ||
| Recognized gain | $180,000 | ||
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