during 2022, makai and mikala, a married couple, decided to sell their residence, which had a basis of $200,000. they had owned and occupied the residence for 20 years. to make it more attractive to prospective buyers, they had the inside painted in may at a cost of $6,000 and paid for the work immediately. they sold the house in may for $800,000. broker's commissions and other selling expenses amounted to $50,000. they purchased a new residence in july for $375,000. the recognized gain of the new residence is $50,000. true false

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22-11-2022
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during 2022, makai and mikala, a married couple, decided to sell their residence, which had a basis of $200,000. they had owned and occupied the residence for 20 years. to make it more attractive to prospective buyers, they had the inside painted in may at a cost of $6,000 and paid for the work immediately. they sold the house in may for $800,000. broker's commissions and other selling expenses amounted to $50,000. they purchased a new residence in july for $375,000. the recognized gain of the new residence is $50,000. true false

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abiolataiwo2015 abiolataiwo2015 · Answer 1 · 2022-11-30T17:54:28+01:00

If during 2022, makai and mikala, a married couple, decided to sell their residence, which had a basis of $200,000. the recognized gain of the new residence is $50,000: True.

How to find the recognized gain?

First step is to find the net gain on the sales of the house

Sale price of house $800,000

Less cost of acquisition of house ($200,000)

Gain on sale of house $600,000

Less commission & selling expenses ($50,000)

Net gain on sale of house $550,000

Now let find the recognized gain of the new residence

Based on the provision of the IRS, the amount deductible for married couple is $500,000.

Hence,

Recognized gain = $550,000 -$500,000

Recognized gain = $50,000

Therefore the statement is true as the recognized gain is $50,000.

Learn more about recognized gain here:https://brainly.com/question/27311471

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