Mr. James purchased a vacation house in Los Angeles on July 1, 2017. The purchase...
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Mr. James purchased a vacation house in Los Angeles on July 1, 2017. The purchase price was $1,000,000, and Mr. James spent $10,000 on capital additions. As of January 1, 2020, the house was worth $1,200,000. Mr. James was not entitled to depreciate the house as it was a personal-use asset.
For the purposes of this question, assume that Mr. James sold the house on December 31, 2020 for $1,400,000. For tax purposes, how much income did Mr. James realize in 2020?
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