In March 2015, Davis, who is single, purchased a new residence for $200,000. During that same month, he sold his former residence for $380,000 and paid the realtor a $20,000 commission. The former residence, his first home, had cost $65,000 in 1996. Davis added a bathroom for $5,000 in 2011. What mount of gain is recognized from the sale of the former residence on Davis' 2015 tax return?
a. $160,000
b. $90,000
c. $40,000
d. $0
Answer: C
Tax
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