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Problem - Lonzo is single. He sold his house and connecting property in July for $395,000. The house was purchased in 1958 by Lonzo and his wife (deceased four years ago) for $35,000. Lonzo completed the following work/purchases to the house during the time he lived there.
Purchase of connecting property $30,000 Repaired heat pump $800
Addition of 1,200 square feet $55,000 Installed central heat/air $4,250
In-ground pool $15,000 Cleaned all plumbing pipes $950
Repaired slate shingles $2,000
Required - Calculate the exclusion on the sale of Lonzo's house?
a) $255,750
b) $260,000
c) $250,000
d) $395,000
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