Resolve all tax issues associated with the acquistion

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Reference no: EM131356904

Maggie's aunt died in 2001 leaving her a home which has been the principle residence of Maggie and her husband ever since. Her aunt aquired the property in 1980 at a cost of $90,000. The aunt made capital improvements over the years totaling $25,000. The property had a fair market value at the aunts death of $250,000. Her aunt's estate elected the alternative valuation date at which time the property had a value of $200,000. In 2003, Maggie and husband added a tennis court (cost $25,000) and paid a city assesment for the installation of sidewalks in their street of $5,000. They sold the home in 2012 for an adjusted sales price of $800,000, and immediately purchased a new home at a cost of $600,000. Magie and her husband file a joint return. Please identify, discuss and resolve all tax issues associated with the acquistion and sale of both the home they inherited from Maggie's aunt, and the purchases of the new home, including an analysis of the basis of their new home.

Reference no: EM131356904

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