Bruce and Libby are married and file a joint return. On January 1, 2012, they purchased a

Question:

Bruce and Libby are married and file a joint return. On January 1, 2012, they purchased a house for $270,000 to be used by them and family members for vacations. They continued to use it for this purpose through December 31, 2014. On January 1, 2015, they converted it to their principal residence. On December 31, 2016, they sold it for $460,000 (selling expenses of $29,000). What is Bruce and Libby's recognized gain on the sale of their principal residence?