Shawn, a single taxpayer, sold the house he lived in for seven years for $700,000.He purchased the house for $285,000.He made improvements at a cost of $125,000 and paid a $30,000 commission on the sale.What are Shawn's realized and recognized gains on the sale?
A)$260,000 realized and recognized
B)$290,000 realized and recognized
C)$260,000 realized and $10,000 recognized
D)$260,000 realized and no gain recognized

Question

Quizplus · Accepted Answer

Shawn's realized gain is $260,000 ($700,000 - $285,000 - $125,000). His recognized gain is $10,000 ($260,000 - $30,000).

Shawn, a Single Taxpayer, Sold the House He Lived in for Seven