Charlotte Purchases a Residence for $105,000 on April 13, 2008 $\begin{array}{llcc} \text { Realized } & \text { Recognized} \\\end{array}$

Short Answer

Charlotte purchases a residence for $105,000 on April 13, 2008. On July 1, 2016, she marries Howard and they use Charlotte's house as their principal residence. On May 12, 2018, they sell their home for $390,000, incurring $20,000 of selling expenses and purchase another residence costing $350,000. What is their realized and recognized gain?
?
$\begin{array}{llcc} \text { Realized } & \text { Recognized} \\\end{array}$
A) $\$ 265,000 \quad \$-0-$
B) $\$ 265,000 \quad \$ 15,000$
C) $\$ 285,000 \quad \$ 65,000$
D) $\$ 265,000 \quad \$45,000$
E) $\$ 285,000 \quad \$-0-$