Tony and Faith Sell Their Home for $495,000, Incurring Selling $\begin{array}{llcc} \text { Realized } & \text { Recognized} \\\end{array}$

Tony and Faith sell their home for $495,000, incurring selling expenses of $25,000. They purchased the residence for $85,000 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?
?
$\begin{array}{llcc} \text { Realized } & \text { Recognized} \\\end{array}$
A) $\$ 365,000 \quad \$-0-$
B) $\$ 365,000 \quad \$ 115,000$
C) $\$ 385,000 \quad \$ 135,000$
D) $\$ 385,000 \quad \$-0-$
E) $\$ 390,000 \quad \$-0-$

Correct Answer:

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