Paula Inherits a Home on July 1, 2017 That Had

question 88

Multiple Choice

Paula inherits a home on July 1, 2017 that had a basis in the hands of the decedent at death of $290,000 and a fair market value of $500,000 at the date of the decedent's death. She decides to sell her old principal residence, which she has owned and occupied for 9 years, with an adjusted basis of $125,000 and move into the inherited home. On September 16, 2017, she sells the old residence for $600,000. Paula incurs selling expenses of $30,000 and legal fees of $2,000. She decides to add a pool, deck, pool house, and recreation room to the inherited home at a cost of $100,000. These additions are completed and paid for on November 1, 2017. What is her recognized gain on the sale of her old principal residence and her basis in the inherited home?

• A)$0; $500,000.
• B)$193,000; $600,000.
• C)$443,000; $600,000.
• D)$475,000; $600,000.
• E)None of the above.

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Definitions:

Cardiovascular Disease

A class of diseases involving the heart and blood vessels, including heart disease, hypertension, and stroke.

Physiological Risk

The potential for harm to bodily functions or processes, often assessed in the context of exposure to harmful substances or stressful conditions.

Hypertension

A chronic medical condition in which the blood pressure in the arteries is elevated, increasing the risk of heart disease, stroke, and other health problems.

Cardiovascular Disease

A class of diseases that involve the heart or blood vessels, including coronary artery disease, hypertension, and heart failure.