Becky Bought a Home with Her Husband,Ken,in 1999 for $125,000

question 26

Multiple Choice

Becky bought a home with her husband,Ken,in 1999 for $125,000.They were divorced in 2008 and Becky became sole owner of the home under the divorce decree.On January 5,2012,Becky married Michael.Michael and Becky have been living in the house since their marriage but they are planning now to move.If Michael and Becky sell their home on December 15,2013 for $500,000,how much taxable gain must they report on their 2013 joint tax return?

• A)zero
• B)$125,000
• C)$250,000
• D)$375,000

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Definitions:

Rate of Return

The percentage gain or loss on an investment over a specified period.

Investor

An individual or entity that allocates money into a financial venture with the expectation of receiving future financial returns.

Contract Value

The total worth or financial commitment of a contract, encompassing all terms, services, or products agreed upon.

Earn

To receive money or another form of payment in exchange for services provided or through investment.