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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?

Financial Accounting, Accounting

  • Category:- Financial Accounting
  • Reference No.:- M94220

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