Donald and Candice Sell Their Home for $695,000,incurring Selling Expenses

question 35

Short Answer

Donald and Candice sell their home for $695,000,incurring selling expenses of $30,000.They purchased the residence for $125,000 and made capital improvements totaling $20,000 during the 20 years they lived there.What is their realized gain and recognized gain on the sale?
$\begin{array}{cc}\text { Realized } & \text { Recognized } \\a.\$ 665,000 & \$ 20,000\\b.\$ 520,000 & \$ -0- \\c.\$ 520,000 & \$ 20,000 \\d.\$ 540,000 & \$ 40,000 \\e.\$ 520,000 & \$ 270,000\end{array}$

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Definitions:

Your Convenience

A phrase often used to suggest a time or place that is easy and suitable for someone to meet or do something.

General Favorable

An overall positive or advantageous condition or situation.

Relevant Material

Content or information that is directly related to the topic at hand and contributes to its understanding or discussion.

Order Acknowledgment

A formal confirmation from a seller to a buyer acknowledging the receipt and detailing the specifications of an order.