Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 28

Dominique is a manager for a regional bank. He is being relocated several states away to act as a temporary manager while a new branch is interviewing for a permanent manager. He will leave on May 1, 2010, and will be at the new location for less than one year. He sells his personal residence on April 15, 2010, for $123,000 (adjusted basis $95,000). Upon completion of the assignment, he purchases a new residence for $200,000.
a. What are Dominique's realized and recognized gain or loss?
b. What is Dominique's basis in the new residence?
c. Assume that Dominique is transferred out of state and sells his new residence for $230,000 60 days later( he is single). What are his realized and recognized gain?