Question & Answer: Taxpayer has owned and lived in Taxpayer’s principal residence for 10 years, the last year with the…..

Taxpayer has owned and lived in Taxpayer’s principal residence for 10 years, the last year with the Taxpayer’s Spouse after they married. Spouses decide to sell the residence which has a $100,000 basis for $500,000.

(a) If the Spouses file a joint return do they have any gross income?

Don't use plagiarized sources. Get Your Custom Essay on
Question & Answer: Taxpayer has owned and lived in Taxpayer’s principal residence for 10 years, the last year with the…..
GET AN ESSAY WRITTEN FOR YOU FROM AS LOW AS $13/PAGE
Order Essay

(b) What result if the Spouses had lived together for two years in Taxpayer’s residence prior to their marriage and sold the residence after one year of marriage for $500,000?

(c) What result in (a), above, if after one year of marriage Taxpayer pursuant to their divorce decree deeded one-half of the residence to Spouse and Spouse lived in the residence while Taxpayer moved out and, one year later, they sold the residence for $500,000?

(d) What result in (a), above, if after one year of marriage Taxpayer pursuant to their divorce decree deeded one-half of the residence to Spouse and Taxpayer continued to occupy the residence while Spouse moved out, and, one year later, they sold the residence for $500,000?

Expert Answer

 

Answer a.
failed 500k, but look at each separately for 250k. Taxpayer owned and used for 2 years so he is entitled to 250 exclusions. Spouse, by reason of saving provision. Since T owned for 10 years S satisfies ownership. Spouse continues to fail the use. Total exclusions each qualify for is 250 and 150 of gain is recognized, but 250 of gain is excluded under statute
Answer b.
Does their marital status matter? Yes, it does. When is marital status determined for purposes for tax returns? On the last day of the tax year. Someone married on the 31st of December is viewed as being married since the beginning of the year. T qualifies under ownership and use, but S does not qualify for ownership ( but “either” in statute doesn’t require ownership by both) but S does qualify under the use provision since she has used it for two years.
Answer c.
Taxpayer selling ½ of it, but has owned and used it for 10 years. The gain would be 200, and the eligibility would be 250. Underlying assumption that this was a 1041 transfer. Spouse has ownership for only 1 year. At the time of sale the spouse owns a half which has been owned for a year, the use is for 2 years. One the face the spouse would not get an exclusion under 121a because she has not owned it for 2 years. 121 d3a.   Spouse qualifies for ownership. D3a, neither one of them will have any recognized gain from this transaction.
Answer d.

Neither one has gross income recognized, each gets 250 exclusion. Just apply d3(B) relaxation provision

Grand Paper Writers
Order NOW For A 10% Discount!
Pages (550 words)
Approximate price: -

Our Advantages

Plagiarism Free Papers

All papers are written by the best professional writers to ensure 100% originality. We always provide plagiarism reports whenever we deliver completed papers.

Free Revisions

All papers by Grand Paper Writers are completed and submitted on time. This timely delivery of papers gives you time to go through the paper before the official deadline.

Title-page

As an additional service, we will provide a title page that precedes the contents of your paper. Here, you will provide your personal details.

Bibliography

We also ensure that we provide an extra page for the references or bibliographies following referencing rules.

Originality & Security

At Grandpaperwriters.com, we guarantee students for the provision of security and original work. All your personal information is handled with confidentiality and is not shared with third parties. Additionally, we ensure that we provide original content with accompanying plagiarism reports to show originality.

24/7 Customer Support

Our customer support team is always available 24/7 to provide instant responses to any queries raised by students.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

Grandpaperwriters.com has the best professional essay writers for quality services.

Pricing

Flexible Pricing

Here, a Grandpaperwriters.com, we do not compromise on the time of our clients. We always deliver all completed papers on or before the deadlines.

Communication

Admission Help & Client-Writer Contact

Grandpaperwriters.com provides an interactive portal where students can communicate directly to their writers.

Deadlines

Paper Submission

Here, a Grandpaperwriters.com, we do not compromise on the time of our clients. We always deliver all completed papers on or before the deadlines.

Reviews

Customer Feedback

Grandpaperwriters.com appreciates feedback from our clients to help us improve the delivery of essay writing services. As such, we are constantly changing our policies to ensure maximum customer and writer satisfaction.