Real Estate Math
A Wisconsin homeowner has owned their primary residence for 3 years and sells it for $550,000. Their adjusted basis is $390,000. Assuming the Section 121 exclusion applies ($250,000 single/$500,000 married filing jointly), what is the taxable gain for a single filer?
A$0✓ Correct
B$10,000
C$50,000
D$160,000
Explanation
Total gain = $550,000 - $390,000 = $160,000. Single exclusion = $250,000.
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Key Terms to Know
Amortization
The gradual repayment of a loan through scheduled periodic payments that cover both principal and interest.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Loan-to-Value Ratio (LTV)The ratio of a mortgage loan amount to the appraised value or purchase price of a property, expressed as a percentage.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Math Concepts
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