Carl Sells His Principal Residence, Which Has an Adjusted Basis

Multiple Choice

Carl sells his principal residence, which has an adjusted basis of $150,000, for $200,000.He incurs selling expenses of $20,000 and legal fees of $2,000.He had purchased another residence for $380,000 one month prior to the sale.What is the recognized gain or loss and the basis of the replacement residence if the taxpayer elects to forgo the § 121 exclusion (exclusion of gain on sale of principal residence) ?

A) $0 and $380,000.
B) $0 and $408,000.
C) $28,000 and $352,000.
D) $28,000 and $380,000.