Pierce sold his home this year.He had owned and lived in the house for 10 years.Pierce signed a contract on March 4 to sell his home. $$\begin{array} { | r | r | }
\hline \text { Sales price } & \$ 600,000 \
\hline \text { Selling expenses } & 15,000 \
\hline \text { Replaced and paid for a broken window on March 2 } & 800 \
\hline \text { Basis of old home before repairs and improvements } & 310,000 \
\hline
\end{array}$$ Based on these facts,what is the amount of his recognized gain?
A)$0
B)$25,000
C)$40,000
D)$275,000

Question

Pierce sold his home this year.He had owned and lived in the house for 10 years.Pierce signed a contract on March 4 to sell his home. $$\begin{array} { | r | r | } 
\hline \text { Sales price } & \$ 600,000 \
\hline \text { Selling expenses } & 15,000 \
\hline \text { Replaced and paid for a broken window on March 2 } & 800 \
\hline \text { Basis of old home before repairs and improvements } & 310,000 \
\hline
\end{array}$$ Based on these facts,what is the amount of his recognized gain?
A)$0
B)$25,000
C)$40,000
D)$275,000

Quizplus · Accepted Answer

The recognized gain is $25,000, which is calculated as follows:Sales price: $600,000Selling expenses: (15,000)Replaced and paid for a broken window: (800)Basis of old home before repairs and improvements: 310,000Adjusted basis: 310,800Gain: $25,000

Pierce Sold His Home This Year Based on These Facts,what Is the Amount of His Recognized