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ArbitrLikvidat [17]
3 years ago
11

Nelson Whiting (single) purchased a home in Denver, Colorado, for $300,000. He moved into the home on July 1 of year 1. He lived

in the home as his primary residence until December 1, year 2, when he sold the home for $450,000. Nelson sold the home because he needed to move to change jobs and his new job was located several hundred miles away. What amount of gain must Nelson recognize on the home sale in year 2?
Business
1 answer:
Levart [38]3 years ago
4 0

Answer:

$150,000

Explanation:

A rise in the worth of an asset over time that puts a higher price than the price the asset was purchased for is called a capital gain. Capital gains are not realized unless the assets are sold over and above their purchase prices.

In this case the asset was bought for $300,000 and sold for $450,000 representing a net gain of $150,000. All other factors remaining same, this is the amount of gain that Nelson can realize. There are normally capital gains tax payable that can be deducted from the net gain, not applicable in this case.

Hope that helps.

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