Selling a Home: Tax Savings for Residential Sales (00124652, 2012)

There are important tax benefits available regarding the sale of a home. Although the housing market remains tight and the inventory of homes waiting to be sold still extensive, there continue to be homeowners who are selling their homes today, often at prices that exceed what they originally paid for their homes. This course discusses some tax rules relating to selling a home. First, it covers the treatment of sellers who realize gains. Then, it addresses the problem of realizing losses. Topics discussed also include the title to a principal residence, reporting sales of a principal residence, and foreclosures.
Final Exam > Results Page

final exam score:
final exam status:
100%

Question 1

Correct
A partial home sale exclusion can be claimed in each of the following situations except:
(You Answered) (Correct Answer) The homeowner does not like the neighbors and moves before completing the two-year tests.
The family must move before completing the two-year tests because the daughter is subject to severe bullying.
The homeowner gets a job across the country before completing the two-year tests.
The homeowner must move because homeowner becomes unable to pay reasonable household expenses.

Question 2

Correct
A married couple purchased a home together in the 1980’s. The husband died in February 2010, and the wife sold the home in December 2011. Assume that the gain is $600,000. What is the maximum exclusion?
$250,000
(You Answered) (Correct Answer) $500,000
$600,000
$150,000

Question 3

Correct
Two unmarried people, each of whom meets the two-year ownership and use test, jointly own a home that is sold for a profit of $600,000. What is the tax result?
(You Answered) (Correct Answer) Each can exclude up to $250,000 on their returns.
Each can exclude up to $300,000 on their returns.
Only one $250,000 exclusion is allocated between them.
Only one $300,000 exclusion is allocated between them.

Question 4

Correct
A home is sold after one year of owning and living there. A partial exclusion is allowed if the sale resulted from:
Winning the lottery.
(You Answered) (Correct Answer) An unforeseen circumstance or natural disaster.
No longer enjoying home ownership.
The homeowner does not like the neighbors

Question 5

Correct
When a lender forecloses upon a home and forgives all or part of the mortgage, which of the following is correct?
The borrower will have taxable income recognition as a result.
The borrower will not have income recognition if the home was a rental home.
The borrower will not have income recognition if the home was a vacation home.
(You Answered) (Correct Answer) Up to $2 million of discharge of indebtedness income may be excluded from income tax of the borrower if certain conditions are met.