James and Ellen Connors, Who Are Both 50 Years Old

question 1645

Essay

James and Ellen Connors, who are both 50 years old and married, sell their personal residence on July 25, 2018, for $950,000. They have lived in the home for 20 years. The basis of the home is $350,000. They purchased a new home for $1,000,000 in August 2018. After living in that home for 219 days, the Connors were forced to sell their new home in 2019 for $1,300,000 and move to another climate due to Ellen's severe health problems.
a. What is the amount of gain recognized on the home sale in 2018?
b. What is the amount of the gain recognized on the home sale in 2019?

---

Definitions:

Gastrocnemius

A significant muscle in the calf that plays a crucial role in the activities of walking, running, and jumping, aiding in the motion of both the ankle and the knee.

Heavy Weight

Refers to objects of a substantial mass, often used in the context of lifting weights in exercise or strength training.

SITS Muscles

Acronym for Supraspinatus, Infraspinatus, Teres Minor, and Subscapularis; a group of muscles that form part of the rotator cuff in the shoulder.

Supraspinatus

A muscle located in the upper back, part of the rotator cuff that helps with arm lifting.