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

question 270

True/False

Matt, who is single, sells his principal residence, which he has owned and occupied for 5 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:

United States

A country located primarily in North America, consisting of 50 states, a federal district, five major territories, and various minor islands.

Binomial Formula

A mathematical formula used to determine the number of successes in a fixed number of trials in a binomial experiment, given the probability of success in each trial.

Independent

Refers to a variable in an experiment or study that is purposely manipulated or changed to observe its effect on other variables.

Successful Operations

Activities or series of activities within a process which achieve the intended goals or objectives efficiently and effectively.