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. What is the recognized gain or loss on the sale of the house?
a. $0.
b. $6,000.
c. $30,000.
d. $40,000.
e. None of the above.