Ron and Mary Carson sold for $370,000 in November of 2020 their residence that they...
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Accounting
Ron and Mary Carson sold for $370,000 in November of 2020 their residence that they had purchased in 2005 for $75,000. They made major capital improvements during their 11-year ownership totaling $68,000.
a. What is their excluded gain? How much must they recognize?
b. Suppose instead that the Carsons sold their home for $753,000. They moved into a smaller house costing $220,000. What is their excluded gain? How much must they recognize?
c. Assume instead that the Carsons resided in a very depressed neighborhood and the home was sold for only $85,000. How much gain or loss is recognized?
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