required information the following information applies to the questions displayed below. this year, leron…

required information the following information applies to the questions displayed below. this year, leron and sheena sold their home for $1,111,500 after all selling costs. under the following scenarios, how much taxable gain does the home sale generate for leron and sheena? assume that the couple is married filing jointly. note: leave no answer blank. enter zero if applicable. required: a. leron and sheena bought the home three years ago for $195,000 and lived in the home until it sold. taxable gain

required information the following information applies to the questions displayed below. this year, leron and sheena sold their home for $1,111,500 after all selling costs. under the following scenarios, how much taxable gain does the home sale generate for leron and sheena? assume that the couple is married filing jointly. note: leave no answer blank. enter zero if applicable. required: a. leron and sheena bought the home three years ago for $195,000 and lived in the home until it sold. taxable gain

Answer

Explanation:

Step1: Calculate the gain

The gain on the sale of the home is calculated by subtracting the purchase - price from the selling price. The selling price is $1,111,500 and the purchase price is $195,000. $Gain = Selling\ price - Purchase\ price$ $Gain=1111500 - 195000$ $Gain = 916500$

Step2: Apply the home - sale exclusion for married filing jointly

For married filing jointly taxpayers, they can exclude up to $500,000 of gain on the sale of their principal residence if they meet the ownership and use tests. Since they lived in the home until it was sold and owned it for three years, they meet the tests. $Taxable\ gain=Gain - Exclusion$ $Taxable\ gain = 916500-500000$ $Taxable\ gain = 416500$

Answer:

416500