Problem 13-85 (LO. 8) Wesley, who is single, listed his personal residence with a real estate agent on March 3, 2021, at a price of $390,000. He rejected several offers in the $350,000 range during the summer. Finally, on August 16, 2021, he and the purchaser signed a contract to sell for $363,000. The sale (i.e., closing) took place on September 7, 2021. The closing statement showed the following disbursements: Real estate agent's commission $21,780 Appraisal fee 600 Exterminator's certificate 300 Recording fees 800 Mortgage to First Bank 305,000 Cash to seller 34,520 Wesley's adjusted basis for the house is $200,000. He owned and occupied the house for seven years. On October 1, 2021, Wesley purchases another residence for $325,000. If an amount is zero, enter "0". a. Calculate Wesley's recognized gain on the sale. b. What is Wesley's adjusted basis for the new residence? C. Assume instead that the selling price is $800,000. What is Wesley's recognized gain? His adjusted basis for the new residence? Wesley's recognized gain is $ and his adjusted basis for the new residence is $ Problem 13-84 (LO. 8, 9) Karl purchased his residence on January 2, 2020, for $260,000, after having lived in it during 2019 as a tenant under a lease with an option to buy clause. On August 1, 2021, Karl sells the residence for $315,000. On June 13, 2021, Karl purchases a new residence for $367,000. If an amount is zero, enter "O". a. What is Karl's recognized gain? His basis for the new residence? Karl's recognized gain is and his basis for the new residence is $ b. Assume that Karl purchased his original residence on January 2, 2019 (rather than January 2, 2020). What is Karl's recognized gain? His basis for the new residence? Karl's recognized gain is $ and his basis for the new residence is $ C. In part (a), what could Karl do to minimize his recognized gain? To minimize his recognized gain, he can continue to own and occupy the residence for a minimum of Then, he may use the exclusion to his realized gain of $ additional months. to $