William and Kate married in 2015 and purchased a new home together.Each had owned and lived in separate residences for the past 5 years.William's adjusted basis in his old residence was $200,000; Kate's adjusted basis in her old residence was $120,000.In late 2015,William sells his residence for $500,000 while Kate sells her residence for $190,000.What is the total gain to be excluded from these transactions in 2015?
A)$0
B)$250,000
C)$320,000
D)$370,000

Question

Quizplus · Accepted Answer

For William, the gain excluded will be the difference between the selling price and his adjusted basis, which is $500,000 - $200,000 = $300,000
For Kate, the gain excluded will be the difference between the selling price and her adjusted basis, which is $190,000 - $120,000 = $70,000
The total gain excluded will be $300,000 (William) + $70,000 (Kate) = $370,000. So, the correct answer is (C) $320,000.

William and Kate Married in 2015 and Purchased a New