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:

Left Frontal Lobe

A section of the brain associated with linguistic skills, logical reasoning, and control over voluntary movements.

Brain Activity

The electrical and biochemical actions that occur within the brain, enabling functions like thought, emotion, and movement.

Neural Pathways

Neural pathways refer to the network of neurons connected by synapses, responsible for transmitting signals between different areas of the brain or nervous system.

Prefrontal Cortex

The front part of the frontal lobe of the brain, involved in complex behaviors such as planning, decision-making, and moderating social behavior.