arl purchased his residence on January 2, 2019, for $260,000, after having lived in it during 2018 as a tenant under a lease with an option to buy clause. On August 1, 2020, Karl sells the residence for $315,000. On June 13, 2020, Karl purchases a new residence for $367,000. If an amount is zero, enter "0". a. What is Karl's recognized gain? His basis for the new residence? Karl's recognized gain is $fill in the blank aa8a5403c02a012_1, and his basis for the new residence is $fill in the blank aa8a5403c02a012_2. b. Assume that Karl purchased his original residence on January 2, 2018 (rather than January 2, 2019). What is Karl's recognized gain? His basis for the new residence? Karl's recognized gain is $fill in the blank f8cfe3ffcff0ffc_1, and his basis for the new residence is $fill in the blank f8cfe3ffcff0ffc_2. c. In part (a), what could Karl do to minimize his recognized gain? To minimize his recognized gain, he can continue to own and occupy the residence for a minimum of fill in the blank 71a4cf07f06c000_1 additional months. Then, he may use the exclusion to his realized gain of $fill in the blank 71a4cf07f06c000_4 to $fill in the blank 71a4cf07f06c000_5.
Problem 13-84 (LO. 8, 9)
Karl purchased his residence on January 2, 2019, for $260,000, after having lived in it during 2018 as a tenant under a lease with an option to buy clause. On August 1, 2020, Karl sells the residence for $315,000. On June 13, 2020, Karl purchases a new residence for $367,000.
If an amount is zero, enter "0".
a. What is Karl's recognized gain? His basis for the new residence?
Karl's recognized gain is $fill in the blank aa8a5403c02a012_1, and his basis for the new residence is $fill in the blank aa8a5403c02a012_2.
b. Assume that Karl purchased his original residence on January 2, 2018 (rather than January 2, 2019). What is Karl's recognized gain? His basis for the new residence?
Karl's recognized gain is $fill in the blank f8cfe3ffcff0ffc_1, and his basis for the new residence is $fill in the blank f8cfe3ffcff0ffc_2.
c. In part (a), what could Karl do to minimize his recognized gain?
To minimize his recognized gain, he can continue to own and occupy the residence for a minimum of fill in the blank 71a4cf07f06c000_1 additional months. Then, he may use the exclusion to his realized gain of $fill in the blank 71a4cf07f06c000_4 to $fill in the blank 71a4cf07f06c000_5.
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