Question

As part of the property settlement related to their divorce, Cindy must give Allen the house that they have been living in, while she gets 100 percent of their savings accounts The house was purchased for $90,000 15 years ago in Southern California and is now worth $700,000. If an amount is zero, enter o". How much gain must Cindy recognize on the transfer of the house to Allen? What is Allen's tax basis in the house for calculating tax on any future sale of the house?

Answer 1

SOLUTION:-

1. How much gain must Cindy recognize on the transfer of the house to Allen?

There was no gain was taxable to Cindy on the transfer of the house since it was the part of a property settlement was related to a divorce.

2. What is Allens tax basis in the house for calculating tax on any future sale of the house?

Allen has a premise of $90,000 in the house for ascertaining charge on any future sale of the house.