On January 5, 2017, Waldo Sells His Principal Residence with an Adjusted

question 23

Essay

On January 5, 2017, Waldo sells his principal residence with an adjusted basis of $270,000 for $690,000. He has owned and occupied the residence for 15 years. He pays $35,000 in commissions and $2,000 in legal fees in connection with the sale. One month before the sale, Waldo painted the exterior of the house at a cost of $5,000 and repaired various items at a cost of $3,000. On October 15, 2017, Waldo purchases a new home for $600,000. On November 15, 2018, he pays $25,000 for completion of a new room on the house, and on January 14, 2019, he pays $15,000 for the construction of a pool. What is the Waldo's recognized gain on the sale of his old principal residence and what is the basis for the new residence?

---

Definitions:

Employees

Individuals who are hired by an employer to perform specific duties and tasks in exchange for compensation.

Work Arrival

The point in time when an individual presents themselves for their employment duties.

Departure Times

Specifically planned or scheduled times at which something or someone departs or leaves a place.

Flex-Time

A flexible work arrangement that allows employees to alter their start and end times, typically within a set framework.