In October of 2016, Tommy and Tammy, husband and wife, sold their (only) residence that they had purchased in 1999 for $1,000,000 paying $300,000 in cash with a $100,000 mortgage from ABC Bank. They lived there the entire time they owned the home, and they made repairs to the electric and plumbing during their 10-year ownership totaling $40,000.They moved into a smaller home that cost them $250,000. How much gain or loss is recognized?a.$700,000.b.$600,000.c.450,000.d.$60,000.e.None of the above.

400,000 paid+40,000 repairs= 440,000

440,000-1,000,000= 560,000gain

500,000 exclusion-560,000= 60,000 recognized gain