Thomas and Tonya Taylor purchased a home for $125,000 on September 15, 2013. On October...
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Thomas and Tonya Taylor purchased a home for $125,000 on September 15, 2013. On October 8, 2014, they were divorced, and as part of the divorce agreement, the home was transferred to Thomas, who sold it on October 16, 2015, for $245,000.
a. How much can Thomas exclude and how much is recognized?
b.Assume instead that, as part of the divorce agreement, Tonya retained ownership of the residence but the use of the home was granted to Thomas as long as Tonya owns the residence. If Tonya sells the residence on October 16, 2015, for $245,000, how much can Tonya exclude?
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