Problem:
Alicia buys a beach house for $425,000 which she uses as her personal vacation home. She builds an additional room on the house for $45,000. She sells the property for $510,000 and pays $30,000 in commissions and $4,000 in legal fees in connection with the sale.
Required:
Question: What is the recognized gain or loss on the sale of the house?
Note: Provide specific examples to support your answers.