Charlotte Purchases a Residence for $105,000 on April 13,2003

question 112

Multiple Choice

Charlotte purchases a residence for $105,000 on April 13,2003.On July 1,2011,she marries Howard and they use Charlotte's house as their principal residence.If they sell their home for $390,000,incurring $20,000 of selling expenses and purchase another residence costing $350,000.Which of the following statements is/are correct concerning the sale of their personal residence?
I
If they sell the residence on June 1,2013,they must recognize a gain of $15,000 on the sale.
II) If they sell the residence on August 1,2013,they will recognize no gain on the sale.

• A)Only statement I is correct.
• B)Only statement II is correct.
• C)Both statements are correct.
• D)Neither statement is correct.

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