During 2015,Howard and Mabel,a married couple,decided to sell their residence.The residence has a basis of $162,000 and has been owned and occupied by them for 11 years.The house was sold in May for $395,000 with broker's commissions and other selling expenses being $24,000.They purchased a new residence in June for $400,000.What is the adjusted basis of the new residence?
A)$0
B)$141,000
C)$162,000
D)$191,000
E)None of the above

Question

Quizplus · Accepted Answer

The adjusted basis of the new residence is not directly calculated from the sale of the old residence. The gain from the sale of the old residence may be excluded under the home sale exclusion rule, but it does not affect the basis of the new residence. The basis of the new residence is its purchase price, $400,000.

During 2015,Howard and Mabel,a Married Couple,decided to Sell Their Residence