Question:
Elvin, 45 years of age sells his residence in 2012, He receives 30,000 in cash and the buyer assumes his $105,000 mortgage, Elvin also pays $6,500 in commissions and transfer costs).
a) Calculate the amount realized on the sale.
b) If the residence was acquired in 1986, and its adjusted basis is 75000, calculate the amount and nature of the taxable gain on the sale (assuming he does not purchase a new residence).