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Homework answers / question archive / On November 1, 2018, Ms
On November 1, 2018, Ms. Green, a joint filer, purchased a condo in Dallas for $405,000. Ms. Green then received an offer of employment in Tampa, and on September 1, 2019, she sold the condo for $432,000 and purchased a new home in Tampa for $315,000. Ms. Green realized a $27,000 capital gain on the sale of the condo. How much gain can Ms. Green exclude on the sale of the condo? A. $27,000 B. $5,000 C. $10,000 D. $0
Answer: Option A $27000
Explanation- Ms Green can get a partial exclusion as she has a change in place of employment which is a good excuse for not living in the home for two full years before she sells.
purchase price of condo = $405000
Selling price of condo =$432000
Capital Gain = purchase price -selling price
= $432000- $405000 = $27000
The condo was used for a period of 10months.
Therefore Ms Green is entitled to a capital gain exemption of= (number of months used/24 x 250000)
=(10/24 x 250000) = $104,166
But since the gain is limited to $27000, the whole amount can be excluded.
