# Critical thinking , accounting homework help

Sale or Conversion of a Personal Residence

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In 1996, Mr. and Mrs. Sellers purchased their first principal
residence for \$100,000. In 2000, they spent \$50,000 to add a room to the
house. In 2010, the entire residence was painted at a cost of \$8,000.
They have spent about \$25,000 in routine maintenance and repairs since
acquiring the home. Determine the following:

1. Calculate the basis of the property
2. Calculate the amount of recognized gain or loss if the home was sold today for \$900,000
3. Calculate the amount of recognized gain or loss if the home was sold today for \$500,000.
4. Calculate the amount of recognized gain or loss if the home was sold today for \$100,000.
5. Explain the tax considerations that Mr. and Mrs. Sellers must
consider if they decided to convert the residence in to a rental
property.

Requirements:
Clearly identify the requirements
being addressed. Show all calculations within the cells of an Excel
spreadsheet. This means that you must use formulas and links so that the
thought process can be examined. Make good use of comments to convey
your thought process as well. No hard coding of solutions. Submit a
single MS Excel file for grading.