Eric and Faye,who Are Married,jointly Own a House in Which $\quad$

question 14

Short Answer

Eric and Faye,who are married,jointly own a house in which they have resided for the past 17 years.They sell the house for $375,000 with realtor's fees of $10,000.Their adjusted basis for the house is $80,000.Since they are in their retirement years,they plan on moving around the country and renting.What is their recognized gain on the sale of the residence if they use the § 121 exclusion (exclusion of gain on sale of principal residence)and if they elect to forgo the § 121 exclusion? $\quad$ With exclusion $\quad$$\quad$ Elect to forgo
a. $\$ 0 \quad\quad\quad\quad\quad\quad\quad \$ 0$
b. $\$ 35,000 \quad\quad\quad\quad \$ 35,000$
c. $\$ 0\quad\quad\quad\quad\quad\quad\$285,000$
d. $\$ 35,000\quad\quad\quad\quad\$285,000$
e. $\$ 285,000 \quad\quad\quad\quad\$ 225,000$

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Definitions:

William Julius Wilson

An American sociologist known for his work on urban sociology, race, and class in the United States.

Positive Neighborhood

An area characterized by factors that contribute to the well-being and quality of life of its residents, such as low crime rates, good schools, and strong community bonds.

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A systematic arrangement or sequence of activities that define the structure and operation of an economy.

William Darity

is an American economist known for his research on inequality, education, and race, particularly in the context of the United States.