Problem: Elvin, 45 years of age, sells his residence in 2008. He recieves $30,000 in cash and the buyer assumes his $105,000 mortgage. Elvin also pays $6,500 in commissions and transfer costs.
a. Calculate the amount realized on the sale.
b. If the residence was acquired in 1986, and its adjusted basis is $75,000, calculate the amount and nature of the taxable gain on the sale (assuming he does not purchase a new residence).