Suppose instead that in the preceding problem the Bennetts sold their home for $800,000. ftey moved into a smaller home costing $250,000. How much gain must they recognize?
A) $560,000
B) $500,000
C) $310,000
D) $60,000
E) None of the above

Question

Quizplus · Accepted Answer

the Bennetts have a realized gain of $560,000 ($800,000 less than $240,000). the y may exclude $500,000 and must recognize $60,000. the fact that they moved into another home is irrelevant and there is no oportunity to defer the $60,000 gain through an adjustment in the basis of the new residence as was the case under the old law.

Suppose Instead That in the Preceding Problem the Bennetts Sold