Question

Mr. and Mrs. Frazier are legally married and realized a $723,000 gain on sale of a home that had been their principal residence for 29 years. They moved into a rented condominium in Naples, Florida. What are the tax consequences of the sale to the Fraziers who file one joint tax return?

Answer 1

Answer: $223,000 long-term capital gain.

Step-by-step explanation:

LEGALLY MARRIED couples who file a JOINT TAX RETURN, selling their Place of PRIMARY RESIDENCE are allowed to reduce by $500,000, their Long-term capital gain.

That means that Mr. and Mrs. Frazier, bless their souls, are allowed to remove $500,000 from the total $723,000 and as such recognize only $223,000 as tax consequence on long-term capital gain.

I guess Uncle Sam likes marriages.

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