Several years ago, Agnes and Wyman Booth bought a home for $200,000. They lived in the home for 10 years and then moved into an apartment. Unable to sell their home immediately, they began renting the property in 2017 and rented it for three years. During the rental period, they earned $24,000 in rent and claimed depreciation deductions of $14,000. After the three rental years, the Booths exchanged the house for $30,000 and a duplex worth $300,000. The Booths will continue to hold the duplex as a rental property. Discuss the tax ramifications, if any, resulting from this exchange.
Other useful tips:
Identify, review, and decipher relevant tax authorities concerning the issues raised in the scenario. At a minimum, this process should include the authority provided above.
Build a substantial case for your designated position.
Prepare a written summary of your argument as well as the implications of your position.
o, Include citations for all tax authorities used in building your argument. The citations should be integrated into your summary rather than listed in an attachment.
The citation format is in the attachment