Virginia, Who Is Single, Sells Her Principal Residence (Adjusted Basis

question 36

Multiple Choice

Virginia, who is single, sells her principal residence (adjusted basis of $150,000) on January 5, 2012, for $380,000.She has owned and occupied it as her principal residence for 20 years.She incurs a realtor's commission of $22,000 and legal fees of $5,000.On January 3, 2012, Virginia purchases a townhouse for $300,000 and uses it as her principal residence.Because it was not near a convenience store, she sells the townhouse on December 20, 2012, for $330,000.She incurs a realtor's commission of $18,000 and legal fees of $4,000.She buys a house on December 1, 2012, for $250,000 and uses it as her principal residence.What is Virginia's recognized gain on the sale of each house and her adjusted basis for the house purchased on December 1, 2012?

• A)$0; $0; and $250,000.
• B)$0; $8,000; and $250,000.
• C)$203,000; $0; and $250,000.
• D)$0; $8,000; and $47,000.
• E)None of the above.

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Definitions:

Free Energy

A thermodynamic quantity that indicates the amount of energy in a system that is available to do work at a constant temperature and pressure.

Entropy

A measure of disorder or randomness in a system, often associated with the second law of thermodynamics.

Enthalpy

A thermodynamic quantity equivalent to the total heat content of a system, often used in the study of heat transfer in chemical reactions.

Hydrogen Acceptor

A molecule that receives or accepts hydrogen atoms or ions during a chemical reaction.