Yolanda Buys a House in the Mountains for $450,000 Which

Multiple Choice

Yolanda buys a house in the mountains for $450,000 which she uses as her personal vacation home. She builds an additional room on the house for $40,000. She sells the property for $560,000 and pays $28,000 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) $38,000
C) $70,000
D) $110,000
E) None of the above