Mitchell and Debbie Dixon,a Married Couple,sell Their Personal Residence to Sophie.Sophie

question 87

Multiple Choice

Mitchell and Debbie Dixon,a married couple,sell their personal residence to Sophie.Sophie pays $225,000 and assumes their $70,000 mortgage.To make the sale,the Dixons pay $4,000 in commissions and $1,000 in legal costs.The couple has 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:

Production Budget

A plan detailing the quantity of each product a company aims to produce within a specific timeframe, factoring in projected sales and inventory requirements.

Finished Goods Inventory

Products that have completed the manufacturing process and are ready for sale.

Cash Budget

A financial plan that estimates cash inflows and outflows over a specific period, used for managing liquidity and ensuring a company can meet its obligations.

Budgeted Cash Receipts

An estimation of the cash a company expects to receive within a certain period, based on projected sales or revenue.