Question

Mr. James purchased a vacation house in Los Angeles on July 1, 2017. The purchase price was $1,000,000, and Mr. James spent $10,000 on capital additions. As of January 1, 2019, the house was worth $1,200,000. Mr. James was not entitled to depreciate the house as it was a personal-use asset. For the purposes of this question, assume that Mr. James sold the house on December 31, 2019, for $1,300,000. For tax purposes, how much income did Mr. James realize in 2019?

Answer 1

Answer- D How much income did Hr. James realiãe in l019. MY. James puerchased a vacaton house purehaed priee is $ Lo00,000 speut on capilal additions = $10,000 House worth $1,200.000 ou Jans2019 2 Income realized by Hy sames in 2019 is= House worth purchaed poice = $1200,000-[$1.000,000-$1000 = $,200,000-$990000 = $E10,000 .. Income realized by Ho. James in2019 is $210,000. on Janpt - purchared price - caplal additions] %3D