Max reimburses Jack and Sue, then the taxes do not affect the basis of the home.
When you sell your house is it taxable income?
Profits from home sales are taxed as capital gains in 2021 at federal rates of 0%, 15%, or 20%, depending on income. The IRS provides homeowners with a write-off, allowing single filers to exclude up to $250,000 of profit and married couples filing jointly to exclude up to $500,000 of profit.
How do you avoid capital gains tax when selling a house?
You can exempt a portion of your taxable gains if you sold the house due to job, your health, or a "unforeseeable occurrence." Save all receipts for house improvement. Your property's cost basis includes more than just the acquisition price. It also incorporates any enhancements you made.
Learn more about capital gains: https://brainly.com/question/24228835
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