Case 1 The Bonita Zimmer Case A FINANCIAL SITUATION MINI-CASE Bonita just turned...
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Accounting
Case 1
The Bonita Zimmer Case
A FINANCIAL SITUATION MINI-CASE
Bonita just turned thirty years of age. She lives in a house that she purchased three years ago for $110,000, right before housing prices began to skyrocket in her area. She was fortunate to purchase the home with $18,000 in down payment money received from her father (who is married) and a loan for the remainder of the home price. She was able to obtain a 6.5 percent thirty-year mortgage. Principal Residence market value: $367,000
If Bonita sells her current residence for full fair market value (excluding commissions and closing costs), and then purchases a new residence for $180,000 in the same calendar year, the amount of proceeds subject to capital gains tax will be:
a. $7,000
b. $28,296
c. $187,000
d. $257,000
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