J sold her qualifying personal residence for $275,000.She incurred selling expenses of $6,000 and "fix-up expenses" of $3,000.J's adjusted basis in her residence was $137,000.What are the amounts of J's gain realized and gain recognized, respectively?

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J's gain realized is calculated by subtracting her adjusted basis and the selling and fix-up expenses from the selling price: $275,000 - $137,000 - $6,000 - $3,000 = $129,000. However, under the U.S. tax code, individuals can exclude up to $250,000 ($500,000 for married couples filing jointly) of gain from the sale of a personal residence, provided they meet certain criteria. Since J's gain of $129,000 is less than the exclusion limit, her gain recognized is $0.

J Sold Her Qualifying Personal Residence for $275,000