Paula Inherits a Home on July 1,2015 That Had a Basis

question 169

Multiple Choice

Paula inherits a home on July 1,2015 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 16,2015,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 1,2015.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:

Pre-Start-Up Inspection

A systematic review conducted on machinery or systems before they are started, ensuring safety, compliance, and functionality.

Field Checkout

The process of verifying and testing equipment and systems at the job site to ensure proper operation according to design specifications.

Commissioning

The process of verifying and checking that a new or modified system performs according to its design specifications and requirements before full operation.

I/O Module

A plug-in assembly, containing two or more identical input or output circuits, that contain the connections between a processor and connected devices.