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A 40 Year Old Buys a Residence Home for $50,000

Question 45

Multiple Choice

A 40 year old buys a residence home for $50,000, resells it for $60,000, and immediately buys a new home for $80,000. He


A) has no immediate tax liability.
B) can use his $125,000 exclusion on capital gains.
C) must pay capital gains taxes on $30,000.
D) must pay taxes now on a $10,000 capital gain.

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