Problem
Single purchases a principal residence after 2008 for a cost of $200,000. Prior to occupying the residence, Single rents the residence for 1 year, taking $10,000 of depreciation on it. Single then occupies it as a personal residence and after owning it for 5 years, sells it for $400,000.
(a) What tax consequences to Single on the sale?
(b) What tax consequences in (a), above, if Single sold the residence for $600,000?
(c) What tax consequences in (a), above, if Single initially occupied the residence for 4 years and then rented it in the 5th year?