On January 5,2014,Waldo Sells His Principal Residence with an Adjusted

Essay

On January 5,2014,Waldo 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,Waldo painted the exterior of the house at a cost of $5,000 and repaired various items at a cost of $3,000.On October 15,2014,Waldo purchases a new home for $600,000.On November 15,2015,he pays $25,000 for completion of a new room on the house,and on January 14,2016,he pays $15,000 for the construction of a pool.What is the Waldo's recognized gain on the sale of his old principal residence and what is the basis for the new residence?