Note Barbara falls into a 335 tax bracket She also purchased

*Note, Barbara falls into a 33.5% tax bracket. She also purchased the home for $110,000.

In December 2012, if Barbara decides to sell her personal residence for the FMV of $400,000. What will be her tax consequences?

Solution

Barbara purchased in Dec 2012 -110000

Sold                                         400000

Capital gains                              290000

Her tax on gains @33,5% = 97150 dollars.