Reference no: EM131330538
Paul and Heather are getting divorced. As part of the divorce settlement, Heather receives a vacation home worth $3,000,000. The couple purchased the vacation home five years ago for $1,000,000. Which of the following statements is true?
If Heather sells the vacation home for $2,500,000, she will have a $500,000 loss.
In any future sale of the vacation home, Heather and Paul will each have a basis of $500,000.
If Heather sells the vacation home for $3,200,000, she will have a gain of $2,200,000.
If Heather sells the vacation home six months after receiving it in the divorce settlement, any gain or loss that she has will be short-term.
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