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:

Allowance

A fixed amount of money given regularly, typically to a child by their parents, for personal spending or to cover specific personal expenses.

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