Matt, Who Is Single, Sells His Principal Residence, Which He

question 56

True/False

Matt, who is single, sells his principal residence, which he has owned and occupied for five years, for $435,000.The adjusted basis is $140,000 and the selling expenses are $20,000.Three days after the sale, he purchases another residence for $385,000.Matt's recognized gain is $25,000 and his basis for the new residence is $385,000.

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Definitions:

Army Corps of Engineers

The Army Corps of Engineers is a U.S. federal agency under the Department of Defense tasked with engineering, designing, and constructing projects to improve rivers, harbors, and other civil works, as well as managing military construction projects.

Wetland

An area of land saturated with water, either permanently or seasonally, characterized by unique ecosystems with distinctive plants and wildlife.

Dredging

The process of removing accumulated sediment and debris from the bottom of lakes, rivers, harbors, and other bodies of water to improve navigation or increase water capacity.

Army Corps of Engineers

A U.S. federal agency under the Department of Defense responsible for public engineering, design, and construction management, including projects for coastal and flood protection, navigation, and environmental restoration.