Charlotte Purchases a Residence for $105,000 on April 13,2003

Multiple Choice

Charlotte purchases a residence for $105,000 on April 13,2003.On July 1,2011,she marries Howard and they use Charlotte's house as their principal residence.If they sell their home for $390,000,incurring $20,000 of selling expenses and purchase another residence costing $350,000.Which of the following statements is/are correct concerning the sale of their personal residence?
I
If they sell the residence on June 1,2013,they must recognize a gain of $15,000 on the sale.
II) If they sell the residence on August 1,2013,they will recognize no gain on the sale.

A) Only statement I is correct.
B) Only statement II is correct.
C) Both statements are correct.
D) Neither statement is correct.