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Ross lives in a house he received as a gift from his father. His father had lived in the house for 12 years. The adjusted
Ross lives in a house he received as a gift from his father. His father had lived in the house for 12 years. The adjusted basis of the house to his father was $160,000 and the fair market value at the time of the gift was $140,000. Ross sells this residence after living in it for 18 months for $150,000 and purchases a new home for $125,000. He incurs selling expenses of $7,000. What is Ross recognized gain or loss and basis for the new residence?
| a. | ($17,000); $125,000. |
| b. | ($17,000); $142,000. |
| c. | $0; $125,000. |
| d. | $3,000; $128,000. |
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