Carl Sells His Principal Residence, Which Has an Adjusted Basis

question 176

Multiple Choice

Carl sells his principal residence, which has an adjusted basis of $150,000 for $200,000. He incurs selling expenses of $20,000 and legal fees of $2,000. He had purchased another residence one month prior to the sale for $380,000. What is the recognized gain or loss and the basis of the replacement residence if the taxpayer elects to forgo the §121 exclusion (exclusion of gain on sale of principal residence) ?

• A) $0 and $380,000.
• B) $0 and $408,000.
• C) $28,000 and $352,000.
• D) $28,000 and $380,000.
• E) None of the above.

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Definitions:

Visual Cortex

The region of the cerebral cortex that processes visual information, located in the occipital lobe of the brain.

Feature Detectors

Cells in the visual cortex that are sensitive to specific features of the environment.

Orientation

A person's basic awareness of who, where, and when they are; can also refer to sexual orientation or the initial introduction to a new environment or situation.

Peripheral Vision

The part of vision that occurs outside the very center of gaze, allowing humans to perceive objects and movement outside of the direct line of vision.