B has owned and lived in his house for over 20 years and he, Ask an Expert

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B has owned and lived in his house for over 20 years and he only owns one residence. He has never sold a residence. B is a single filer and has properly used a portion of his home for a home office. Over this period B claimed $14,000 of depreciation deductions relating to his home office. During the current B sold his house for a $200,000 gain. Which of the following is most accurate?

a. $14,000 of the gain is recognized because the depreciation is not eligible for the home exclusion.

b. $200,000 is recognized because B's business use of his home causes the character of the gain to be business and not eligible for the home sale exclusion.

c. No gain is recognized because B meets all tests for exclusion of gain on a home sale.

d. $236,000 of gain is recognized.

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Accounting Basics, Accounting

Category:- Accounting Basics
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