QUESTION 12 During 2020, Matthew and Isabella, a married couple, decided to sell their residence, which had a basis of $200,000. They had owned and occupied the residence for 20 years. To make it more attractive to prospective buyers, they had the inside painted in April at a cost of $5,000 and paid for the work immediately. They sold the house in May for $850,000. Broker's commissions and other selling expenses amounted to $50,000. The couple purchased a new residence in July for $600,000. What is the recognized gain and the adjusted basis of the new residence? a $45,000 and $400,000 b. S50,000 and $400,000 c$100,000 and 5600,000 d. 5550,000 and $800,000 e. None of the above