Nelson Whiting (Single) Purchased a Home in Denver, Colorado for $300,000

question 64

Essay

Nelson Whiting (single) purchased a home in Denver, Colorado for $300,000. He moved into the home on July 1 of year 1. He lived in the home as his primary residence until December 1, year 2 when he sold the home for $450,000. Nelson sold the home because he needed to move because he was changing jobs and his new job was located several hundred miles away. What amount of gain must Nelson recognize on the home sale in year 2?

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Definitions:

Straight-Line Basis

A method of calculating depreciation and amortization by evenly spreading the cost of an asset over its useful life.

Pension Retirement Benefits

Long-term benefits or compensations provided to employees upon retirement, which may include contributions made by the employer to a pension plan.

U.S. Tax Laws

The body of laws governing federal, state, and local taxation in the United States, affecting individuals, businesses, corporations, and other entities.

Postretirement Benefit Expense

The cost incurred by an employer to provide non-pension postretirement benefits such as health care to retired employees, recognized during the period in which the employees render services.