Hannah,a Single Taxpayer,sold Her Primary Residence on January 1,2017

question 22

Multiple Choice

Hannah,a single taxpayer,sold her primary residence on January 1,2017.Her total realized gain is $210,000.The house was acquired on January 1,2007,and rented to tenants until December 31,2013.Hannah moved in on January 1,2014,and used the house as her principal residence until the sale.During the rental period,$30,000 of depreciation was deducted.Due to the sale of the house in 2017,Hannah will recognize a gain of

• A)$147,000.
• B)$30,000.
• C)$90,000.
• D)$120,000.

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Definitions:

Retained Earnings

Retained earnings refer to the portion of net income that is retained by the corporation rather than distributed to its shareholders as dividends.

Market Value

The current value of an asset or company based on the price that a buyer is willing to pay in the market.

Liquidating Dividend

A type of dividend payment made by a corporation using its capital base rather than earnings, typically during partial or full liquidation.

Dividend Policy

A strategy a company uses to decide how much it will pay out to shareholders in dividends.