Paula Inherits a Home on July 1,2014 That Had a Basis

Multiple Choice

Paula inherits a home on July 1,2014 that had a basis in the hands of the decedent at death of $290,000 and a fair market value of $500,000 at the date of the decedent's death.She decides to sell her old principal residence,which she has owned and occupied for 9 years,with an adjusted basis of $125,000 and move into the inherited home.On September 16,2014,she sells the old residence for $600,000.Paula incurs selling expenses of $30,000 and legal fees of $2,000.She decides to add a pool,deck,pool house,and recreation room to the inherited home at a cost of $100,000.These additions are completed and paid for on November 1,2014.What is her recognized gain on the sale of her old principal residence and her basis in the inherited home?

A) $0;$500,000.
B) $193,000;$600,000.
C) $443,000;$600,000.
D) $475,000;$600,000.
E) None of these.