Donald and Candice Sell Their Home for $695,000,incurring Selling Expenses

question 21

Short Answer

Donald and Candice sell their home for $695,000,incurring selling expenses of $30,000.They purchased the residence for $125,000 and made capital improvements totaling $20,000 during the 20 years they lived there.What is their realized gain and recognized gain on the sale?
$\begin{array}{llc}&\text { Realized } & \text { Recognized } \\\text { a. }& \$ 665,000 & \$ 20,000 \\\text { b. }& \$ 520,000 & \$ -0- \\\text { c. } & \$ 520,000 & \$ 20,000 \\\text { d. } & \$ 540,000 & \$ 40,000 \\\text { e. } &\$ 520,000 & \$ 270,000\end{array}$

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