Mitchell and Debbie,both 55 Years Old and Married,sell Their Personal

question 81

Multiple Choice

Mitchell and Debbie,both 55 years old and married,sell their personal residence to Sophie.Sophie pays $225,000 and assumes their $70,000 mortgage.To make the sale they pay $4,000 in commissions and $1,000 in legal costs.They have owned and lived in the house for seven years and their tax basis is $125,000.What is the amount of gain recognized on the sale?

• A)$0
• B)$100,000
• C)$165,000
• D)$170,000

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Definitions:

Response Surface

A graphical representation used in statistical analysis to visualize the relationship between multiple independent variables and one or more dependent variables.

Polynomial Model

A regression model where the relationship between the independent variable and the dependent variable is expressed as an nth degree polynomial.

Independent Variable

The variable in an experiment that is manipulated or changed by the researcher to observe its effect on the dependent variable.

Second-Order Model

A second-order model in statistics or mathematics represents relationships where the effect of variables is not just linear but can also include squared terms or interactions between variables.