Tony and Janice Have Been Married and Living Together in Tony's

Multiple Choice

Tony and Janice have been married and living together in Tony's home for 5 years.He lived in the home alone for 20 years prior to their marriage.They sell the home,which has an adjusted basis of $80,000,for $450,000.Tony and Janice plan to use the § 121 exclusion (exclusion of gain on sale of principal residence) .In Janice's prior marriage to Dan,Dan sold his principal residence and used the § 121 exclusion.Janice and Dan filed joint returns during their years of marriage.Tony and Janice purchase a replacement residence for $200,000 one month after the sale.What is the recognized gain and basis for the new home?

A) $0;$80,000.
B) $0;$200,000.
C) $120,000;$200,000.
D) $370,000;$200,000.
E) None of the above.