QuestionJune 4, 2025

Murray (age 68, single)just sold his home of 35 years so that he could relocate nearer his grandchildren. He realized a 400,000 capital gain on the home.How much of this gain will Murray have to pay taxes on? 300,000 250,000 150,000 0 400,000

Murray (age 68, single)just sold his home of 35 years so that he could relocate nearer his grandchildren. He realized a 400,000 capital gain on the home.How much of this gain will Murray have to pay taxes on? 300,000 250,000 150,000 0 400,000
Murray (age 68, single)just sold his home of 35 years so that he could relocate nearer his grandchildren. He realized a 400,000 capital
gain on the home.How much of this gain will Murray have to pay taxes on?
 300,000
 250,000
 150,000
 0
 400,000

Solution
4.7(198 votes)

Answer

150,000 Explanation 1. Determine Exclusion Eligibility Murray is eligible for the home sale exclusion as he has lived in the home for more than 2 years. 2. Apply Home Sale Exclusion The IRS allows a 250,000 exclusion for single filers on capital gains from the sale of a primary residence. 3. Calculate Taxable Gain Subtract the exclusion from the capital gain: 400,000 - 250,000 = 150,000.

Explanation

1. Determine Exclusion Eligibility<br /> Murray is eligible for the home sale exclusion as he has lived in the home for more than 2 years.<br />2. Apply Home Sale Exclusion<br /> The IRS allows a $250,000$ exclusion for single filers on capital gains from the sale of a primary residence.<br />3. Calculate Taxable Gain<br /> Subtract the exclusion from the capital gain: $400,000 - 250,000 = 150,000$.
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