1. Jack and Kim were coworkers who fell in love and got married. They sold their principal residence in MD for the net amount of $1,000,000 after all selling expenses. Jack and L bought the house 9 years ago and occupied it until it was sold. On the date of sale, the house had a cost basis of $200,000. What amount of gain should Jack and Kim recognize from the sale of the residence?

   1. $1,000,000

   2. $800,000

   3. $300,000

   4. $550,000