Real Estate Math

A New Mexico seller is taxed on their capital gain from the sale of their primary residence. They bought the home for $180,000 and sold it for $480,000 after 10 years. Assuming a $250,000 single-filer exclusion, what is the taxable capital gain?

A$0 (fully excluded)
B$50,000✓ Correct
C$100,000
D$300,000

Explanation

Gain = $480,000 - $180,000 = $300,000. Minus $250,000 exclusion (single filer, met 2-of-5 year rule) = $50,000 taxable capital gain.

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