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Carlotta moved into a smaller home ten months ago, after her husband died. She sold the home that they had lived
in together for fifteen years and elected Section 121 so she would not have to recognize the $150,000 of gain on that home. She then purchased the smaller home for $210,000. She is unhappy in the neighborhood after living there for 10 months and wants to move again. If she sells the home for $235,000, what is her realized and recognized gain? How would your answer change if Carlotta were forced to move into a nursing home because of her health?
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