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NEW QUESTION: 1

A. Option D
B. Option B
C. Option C
D. Option E
E. Option A
Answer: C,E

NEW QUESTION: 2
Ryan, age 57, is single with no dependents. On July 1, 1997, Ryan's principal residence was sold for the
net amount of $500,000 after all selling expenses. Ryan bought the house in 1963 and occupied it until
sold. On the date of sale, the house had a basis of $180,000. Ryan does not intend to buy another
residence. What is the maximum exclusion of gain on sale of the residence that may be claimed in Ryan's
1 997 income tax return?
A. $250,000
B. $0
C. $320,000
D. $125,000
Answer: A
Explanation:
Explanation
Choice "b" is correct. $250,000 maximum exclusion from taxable income.
Rule: An individual may exclude from income up to $250,000 gain provided that the property was the
taxpayer's primary residence for 2 of the last 5 years. Married taxpayers may exclude gains up to
$ 500,000.
Choice "a" is incorrect. $320,000. Ryan, age 57, was not married. Thus, his exclusion was limited to
$ 250,000.
Choice "c" is incorrect. The $125,000 exclusion was old law and eliminated for sales after 5/6/97.
Choice "d" is incorrect, per the above rule.

NEW QUESTION: 3

A. Option C
B. Option D
C. Option B
D. Option A
Answer: D