Part A On January 5, 2020, Matthew (a single taxpayer) sells his principal residence with an adjusted basis of $170,000 for $490,000. He has owned and occupied the residence for 20 years. He pays $15,000 in commissions and $1,000 in legal fees in connection with the sale. One month before the sale, Matthew painted the exterior of the house at a cost of $2,000 and repaired various items at a cost of $2,000. What is Matthew's recognized gain on the sale of his residence?

Part B Carol and Peter, who are both 50 years old and married, sell their personal residence on July 1, 2020 for $1,200,000. They purchased the home for $925,000 in September 1, 2019 after living in a rental apartment for the past 15 years. In early 2020, Carol developed severe health problems and her doctors recommended that they move to a warmer climate. What is Carol and Peter's recognized gain on the sale of their residence?