Stan, a single taxpayer, purchased a new home. After three months, he sold the home because of a job transfer. Assuming his gain on the sale was $40,000, how much is Stan’s taxable gain, assuming he purchased a new home for $300,000?
Stan is eligible for a partial exclusion because he sold the home due to a job change.Partial exclusion is $31,250 = ($250,000 full exclusion for single individual x 3/ 24 number of months ofuse divided by number of months required use)Therefore, the taxable gain is $8,750 ($40,000 - $31,250 exclusion).
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