Bob owns a rental property that he bought several years ago for $260,000.He has taken depreciation on the house of $37,000 since buying it.He sells it in 2013 for $290,000.His selling expenses were $12,000 for the year.What was Bob's realized gain on the sale?

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Quizplus · Accepted Answer

Bob's realized gain is calculated as follows: Selling price ($290,000) - Selling expenses ($12,000) = Amount realized ($278,000). Adjusted basis = Original purchase price ($260,000) - Depreciation ($37,000) = $223,000. Realized gain = Amount realized ($278,000) - Adjusted basis ($223,000) = $55,000.

Bob Owns a Rental Property That He Bought Several Years