On January 5, 2019, Warren Sells His Principal Residence with an Adjusted

Essay

On January 5, 2019, Warren sells his principal residence with an adjusted basis of $270,000 for $690,000.He has owned and occupied the residence for 15 years.He pays $35,000 in commissions and $2,000 in legal fees in connection with the sale.One month before the sale, Warren painted the exterior of the house at a cost of $5,000 and repaired various items at a cost of $3,000.On October 15, 2019, Warren purchases a new home for $600,000.On November 15, 2020, he pays $25,000 for completion of a new room on the house, and on January 14, 2021, he pays $15,000 for the construction of a pool.What is the Warren's recognized gain on the sale of his old principal residence and what is the basis for the new residence?