Answer -
Step - (1) - Relevant Note on the Gain on Sale of Main Home -
As per U.S. Internal Revenue Service, If a taxpayer meets the following tests, they can exclude up to $500000 (if married and file a joint return) of the gain from the sale of a main home:
.
Step - (2) - Determination of Amount of Gain that Steve and Stephanie recognize on the sale -
Amount ($) | Explanation | |
Recognized Gain on sale | 0 | They realized a $352500 ($940000-$587500) gain on the sale. However, the couple qualifies for the married filing joint exclusion of $500000 because they meets the tests. Consequently, they can exclude the entire gain. |
Required information [The following information applies to the questions displayed below.) Steve Pratt, who is single,...
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