Craig and Sally, a Married Couple, File a Joint Tax

question 12

Essay

Craig and Sally, a married couple, file a joint tax return and report taxable income (excluding their home sale) of $325,000 for 2018. They purchased their home on December 1, 2016 for $250,000 and have made $100,000 of improvements during the time they owned the home. They sold the home on May 31, 2018 after Craig accepted a job in another state netting $775,000 after the expenses of the sale. What are the tax consequences of this sale?

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Definitions:

Psychology

The scientific study of the human mind and its functions, particularly those affecting behavior in a given context.

Observable Behavior

Actions or reactions of an individual that can be directly seen and measured.

American Psychologists

Professionals based in the United States specializing in the study of cognitive, emotional, and social processes and behavior by observing, interpreting, and recording how individuals relate to one another and their environments.

John B. Watson

An American psychologist who is considered one of the founders of behaviorism, emphasizing the importance of observable behaviors over internal states.