Donald and Candice Sell Their Home for $695,000,incurring Selling Expenses

Short Answer

Donald and Candice sell their home for $695,000,incurring selling expenses of $30,000.They purchased the residence for $125,000 and made capital improvements totaling $20,000 during the 20 years they lived there.What is their realized gain and recognized gain on the sale?
$\begin{array}{cc}\text { Realized } & \text { Recognized } \\a.\$ 665,000 & \$ 20,000\\b.\$ 520,000 & \$ -0- \\c.\$ 520,000 & \$ 20,000 \\d.\$ 540,000 & \$ 40,000 \\e.\$ 520,000 & \$ 270,000\end{array}$