Janice Bought Her House in 2008 for $395,000

question 114

Multiple Choice

Janice bought her house in 2008 for $395,000. Since then, she has deducted $70,000 in depreciation associated with her home office and has spent $45,000 replacing all the old pipes and plumbing. She sells the house on July 1, 2017. Her realtor charged $34,700 in commissions. Prior to listing the house with the realtor, she spent $300 advertising in the local newspaper. Don buys the house for $500,000 in cash and assumes her mortgage of $194,000. What is Janice's adjusted basis at the date of the sale and the amount realized?

• A)$370,000 adjusted basis; $661,400 amount realized.
• B)$370,000 adjusted basis; $659,000 amount realized.
• C)$370,000 adjusted basis; $665,200 amount realized.
• D)$325,000 adjusted basis; $663,200 amount realized.
• E)$325,000 adjusted basis; $694,000 amount realized.

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Definitions:

Lincoln

Abraham Lincoln, the 16th President of the United States, who led the country during the Civil War and is credited with emancipating the slaves.

Savannah

A coastal city in the state of Georgia, known for its well-preserved historic district, cobblestone squares, and significant role in the American Civil War.

Re-elected

Refers to the act of being elected again to a position or office, typically after an initial or preceding term.

Sherman And Sheridan

Two Union generals, William Tecumseh Sherman and Philip Sheridan, known for their strategies and roles in the American Civil War that contributed significantly to the defeat of the Confederate States.