Shawn,a Single Taxpayer,sold the House He Has Lived in for Seven

question 29

Multiple Choice

Shawn,a single taxpayer,sold the house he has lived in for seven years for $700,000.He purchased the house for $285,000.He made improvements at a cost of $125,000 and paid a $30,000 commission on the sale.What are Shawn's realized and recognized gains on the sale?

• A)$260,000 realized and recognized
• B)$290,000 realized and recognized
• C)$260,000 realized and $10,000 recognized
• D)$260,000 realized and no gain recognized
• E)None of the above

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Definitions:

Consumer Dollar

Refers to the purchasing power of a consumer's money, indicating how much goods or services one dollar can buy.

Services

Economic activities that provide intangible products, such as education, healthcare, and financial and professional services, rather than physical goods.

Income Levels

Categories or ranges of income that differentiate various groups within a society, often used in analyzing economic and social status.

Saving

The portion of income not spent on current expenditures or taxes, typically set aside for future use or investment.