Mai, a single taxpayer, sells her residence in the suburbs for $300,000. She bought the house twelve years ago for $60,000 and made $30,000 of improvements to it. Mai buys a new downtown condominium for $155,000 a few weeks after she sells her suburban residence.

a. What are Mai’s realized gain and recognized gain on the sale? What is her basis in the condominium?

b. Assume that Mai sells the property for $350,000. What are her realized gain and recognized gain on the sale? What is her basis in the condominium?