Reference no: EM132075081

Question - Kathy's salary for 2014 was $60,000 and she had $10,000 interest income. Kathy claims the standard deduction and she has one dependent offspring, 7 years old. Kathy bought the house on May 1, 2009 for $800,000. She also spent $50,000 in permanent improvements to the home. She initially used the house to make rental income. She used the house for rented from May 1, 2009 to May 1, 2012. On May 1, 2012 Kathy moved into the home and used it as her main house until it was sold on May 1, 2014. While the home was rented, Kathy claimed depreciation $30,000 as a deduction on her income tax return. The house was sold for $1,100,000. Our tasks is to Provide a detailed report of the amount of taxable gain Kathy needs to report on her 2014 tax return. How much money she may deduct from tax base on her situation? Research some court case references or relate regulation.