Essay
On January 5, 2017, Waldo sells his principal residence with an adjusted basis of $270,000 for $690,000. He has owned and occupied the residence for 15 years. He pays $35,000 in commissions and $2,000 in legal fees in connection with the sale. One month before the sale, Waldo painted the exterior of the house at a cost of $5,000 and repaired various items at a cost of $3,000. On October 15, 2017, Waldo purchases a new home for $600,000. On November 15, 2018, he pays $25,000 for completion of a new room on the house, and on January 14, 2019, he pays $15,000 for the construction of a pool. What is the Waldo's recognized gain on the sale of his old principal residence and what is the basis for the new residence?
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The $5,000 for painting and $3,000...View Answer
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Correct Answer:
Verified
The $5,000 for painting and $3,000...View Answer
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