Lenny and Beverly have been married and living together in Lennys home for 6 years.

He lived in the home alone for 20 years prior to their marriage. They sell the home, which

has an adjusted basis of $120,000, for $700,000. Lenny and Beverly plan to use the 121

exclusion (exclusion of gain on sale of principal residence). In Beverlys prior marriage

to Dan, Dan sold his principal residence and used the 121 exclusion. Beverly and Dan

filed joint returns during their seven years of marriage. They had lived in Dans house

throughout their marriage. Dans sale had occurred one year prior to the divorce. Lenny

and Beverly purchase a replacement residence for $650,000 one month after the sale.

What is the recognized gain and basis for the new home?