Problem: March 3, 2013, at a price of $390,000 He rejected numerous offers in the $350,000 range during the summer. At last, on August 16, 2013, he and the purchaser signed the contract to sell for $363,000. The sale (i.e., closing) took place on September 7, 2013. The closing statement demonstrate the following disbursements:
Real estate agent’s commission $ 21,780
Appraisal fee 600
Exterminator’s certificate 300
Recording fees 800
Mortgage to First Bank 305,000
Cash to seller 34,520
Wesley’s adjusted basis for the house is $200,000. He owned and occupied house for seven years. On October 1, 2013, Wesley buys another residence for $325,000.
Ouestion1. Evaluate Wesley’s recognized gain on the sale.
problem2. What is Wesley’s adjusted basis for new residence?
problem3. Suppose instead that the selling price is $800,000. What is Wesley’s recognized gain?