Required information Problem 14-39 (LO 14-2) (Algo) [The following information applies to the questions displayed below.] Steve and Stephanie Pratt purchased a home in Spokane, Washington, for $459,500. They moved into the home on February 1 of year 1. They lived in the home as their primary residence until June 30 of year 5, when they sold the home for $730,000. (Leave no answer blank. Enter zero if applicable.) Problem 14-39 Part c (Algo) C. Assume the same facts as in part (b), except that the Pratts live in the home until January of year 4, when they purchase a new home and rent out the first home. What amount of realized gain on the sale of the home will the Pratts include in taxable income if they sell the first home on June 30 of year 5 for $730,000? X Answer is complete but not entirely correct. Recognized gain $ 20,500 Required information Problem 14-48 (LO 14-3) (Algo) [The following information applies to the questions displayed below.] On January 1 of year 1, Arthur and Aretha Franklin purchased a home for $2.83 million by paying $330,000 down and borrowing the remaining $2.50 million with a 8.8 percent loan secured by the home. The Franklins paid interest only on the loan for year 1, year 2, and year 3 (unless stated otherwise). (Enter your answers in dollars and not in millions of dollars. Do not round intermediate calculations. Leave no answer blank. Enter zero if applicable.) Problem 14-48 Part a (Algo) a. What is the amount of interest expense the Franklins may deduct in year 3 assuming year 1 is 2017? Deductible interest expense