Essay Two Part 1. Bobby and Bobbi were married in 2000 and in October 2015,...
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Essay Two Part 1. Bobby and Bobbi were married in 2000 and in October 2015, they sold for $450,000 their principal residence that they had purchased in 2004 for $200,000. The property was owned by them as tenants by the entirety. They made major capital improvements during their 10-year ownership totaling $40,000. What Code Section is applicable to the amount of gain recognized, and what, if any, is their recognized gain? a. $250,000; Code Section 1014. b. $210,000; Code Sections 61 and 1001. c. $-0-; Code Section 1034. d. $-0-; Code Section 121. e. None of the above Letter Answer: ____ Explanation: Part 2. Suppose instead that in the preceding problem (part 1) Bobby and Bobbi sold their home for $800,000. They moved into a smaller home costing $250,000. How much gain must they recognize? a. $560,000. b. $500,000. c. $310,000. d. $60,000. e. None of the above. Letter Answer: ____ Explanation:
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