Laura, age 30, has owned her principal residence (adjusted basis of $225,000) in Jamestown, North Dakota, for five years. During the first three years of ownership, she occupied it as her principal residence. During the past two years, she was in graduate school and rented the residence. After graduate school, Laura returned to Jamestown but decided to purchase a different residence for $400,000 and listed her old residence for sale at $340,000. Due to a slow real estate market, 11 months later Laura finally receives an offer of $330,000.

Prepare a detailed analysis with calculations that addresses each of the following.

1. What is Laura's recognized gain if she immediately accepts the $330,000 offer (i.e., 11 months after the listing date)? Selling expenses are $20,000.

2. What is Laura's recognized gain if she rejects the $330,000 offer and accepts another offer of $340,000 three months later (i.e., 14 months after the listing date)?

3. Advise Laura as to which offer she should accept based on potential tax savings (assume that she is in the 24% tax bracket).

**This is the information provided, it says assume the 24% tax bracket; but nothing about rate of interest.

Adapted from Southwestern Federal Taxation 2019: Comprehensive, 42ndedition, Maloney, Raabe, Hoffman, Young