Background Information: Mira (age 68) and Jay Patel began working with you five years ago. Unfortunately, Jay died 18 months ago, after a short illness. You have determined that between Miras IRA, her Social Security income, Jays IRA and his survivor pension income she should be able to live comfortably into her late 90s. When you met shortly after Jays death, you recommended that she wait a year or so before making any major decisions such as moving, etc. Mira worked as a human resource professional before retiring at age 65. She rolled her 401(k) balance into an IRA when she retired. For the current year, Mira will file her taxes as single filer status. She lives in a common law state. You are scheduled to meet with her in a week. Today, you received the following email from Mira: Hi ---- Thanks for your email earlier this week. Lunch after our meeting sounds wonderful. I thought Id give you heads up about some of the things Id like to talk about. First, I want to thank you for your advice last year about waiting a while to make any big decisions. Things have settled down and I have a better idea of what I want to do. 1. Id like to sell the house and move into a townhouse a mile or so from the grandkids. I watch them after school so this would be convenient, plus, Id love to escape the maintenance of a house. Jay and I bought this house (jointly owned) 20 years ago, so this is a big change for me. Can you give me an idea of the capital gain? Heres what I can tell you let me know if you need any other information: We bought the house in 2003 for $226,000. Weve done repairs, but no additions, etc. Our mortgage was originally $150,000, 30 year term and the rate was 5.25%. We refinanced 3 years ago, for $90,000 (15 year term and a rate of 3.5%). The current balance is $75,564. The last time I thought about the house value was while settling Jays estate. Lily (my daughter) filed the estate paperwork, and the house was valued at $600,000. I spoke with a realtor this week who did a market analysis. She thinks it will sell for $720,000. Her commission is 6% of the selling price.

Question: Based on the details Mira shared with you regarding the potential house sale, please identify the capital gain that would be recognized if she sells the house in one month. Please show your calculations and explain your answer.