Troy (single) purchased a home in Hopkinton, Massachusetts, on January 1, 2007, for $325,000. He sold the home on January 1, 2019, for $346,200. How much gain must Troy recognize on his home sale in each of the following alternative situations? a. Troy rented out the home from January 1, 2007, through November 30, 2008. He lived in the home as his principal residence from December 1, 2008, through the date of sale. Assume accumulated depreciation on the home at the time o sale was $10,800. ANS: 10,800 b. Troy lived in the home as his principal residence from January 1, 2007, through December 31, 2014. He rented out the home from January 1, 2015, through the date of the sale. Assume accumulated depreciation on the home at the time of sale was $5,800. ANS: 27,000 c. Troy lived in the home as his principal residence from January 1, 2007, through December 31, 2016. He rented out the home from January 1, 2017, through the date of the sale. Assume accumulated depreciation on the home at the time of sale was $0. ANS: 0 Troy rented out the home from January 1, 2007, through December 31, 2014. He lived in the home as his principal residence from January 1, 2015, through December 31, 2015. He rented out the home from January 1, 2016, through December 31, 2016, and lived in the home as his principal residence from January 1, 2017, through the date of the sale. Assume accumulated depreciation on the home at the time of sale was $0.
Troy (single) purchased a home in Hopkinton, Massachusetts, on January 1, 2007, for $325,000. He sold the home on January 1, 2019, for $346,200. How much gain must Troy recognize on his home sale in each of the following alternative situations? a. Troy rented out the home from January 1, 2007, through November 30, 2008. He lived in the home as his principal residence from December 1, 2008, through the date of sale. Assume accumulated depreciation on the home at the time o sale was $10,800. ANS: 10,800 b. Troy lived in the home as his principal residence from January 1, 2007, through December 31, 2014. He rented out the home from January 1, 2015, through the date of the sale. Assume accumulated depreciation on the home at the time of sale was $5,800. ANS: 27,000 c. Troy lived in the home as his principal residence from January 1, 2007, through December 31, 2016. He rented out the home from January 1, 2017, through the date of the sale. Assume accumulated depreciation on the home at the time of sale was $0. ANS: 0 Troy rented out the home from January 1, 2007, through December 31, 2014. He lived in the home as his principal residence from January 1, 2015, through December 31, 2015. He rented out the home from January 1, 2016, through December 31, 2016, and lived in the home as his principal residence from January 1, 2017, through the date of the sale. Assume accumulated depreciation on the home at the time of sale was $0.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Troy (single) purchased a home in Hopkinton, Massachusetts, on January 1, 2007, for $325,000. He sold the home on
January 1, 2019, for $346,200. How much gain must Troy recognize on his home sale in each of the following alternative
situations?
a. Troy rented out the home from January 1, 2007, through November 30, 2008. He lived in the home as his principal
residence from December 1, 2008, through the date of sale. Assume accumulated depreciation on the home at the time of
sale was $10,800.
ANS: 10,800
b. Troy lived in the home as his principal residence from January 1, 2007, through December 31, 2014. He rented out the
home from January 1, 2015, through the date of the sale. Assume accumulated depreciation on the home at the time of
sale was $5,800.
ANS: 27,000
c. Troy lived in the home as his principal residence from January 1, 2007, through December 31, 2016. He rented out the
home from January 1, 2017, through the date of the sale. Assume accumulated depreciation on the home at the time of
sale was $0.
ANS: 0
Troy rented out the home from January 1, 2007, through December 31, 2014. He lived in the home as his principal
residence from January 1, 2015, through December 31, 2015. He rented out the home from January 1, 2016, through
December 31, 2016, and lived in the home as his principal residence from January 1, 2017, through the date of the sale.
Assume accumulated depreciation on the home at the time of sale was $0.
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