March 3, 2013, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on August 16, 2013, he and the purchaser signed a contract to sell for $363,000. The sale (i.e., closing) took place on September 7, 2013. The closing statement showed the following disbursements:
- Real estate agent's commission $ 21,780
- Appraisal fee 600
- Exterminator's certificate 300
- Recording fees 800
- Mortgage to First Bank 305,000
- Cash to seller 34,520
Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2013, Wesley purchases another residence for $325,000.
a. Calculate Wesley's recognized gain on the sale.
b. What is Wesley's adjusted basis for the new residence?
c. Assume instead that the selling price is $800,000. What is Wesley's recognized gain? His adjusted basis for the new residence?