Henry Oldham purchased the office building in which his CPA firm was housed in 1983. Henry purchased the building for $225,000. Henry replaced the windows in the building and restructured the lay-out of the offices in the building. His costs were $32,000 for the improvement. Henry is retiring and has just sold the building for $495,000. Henry has claimed $55,000 in depreciation. Henry will have selling costs of $5,000. What is Henry's gain on the sale?

Question

Quizplus · Accepted Answer

Henry's gain on the sale is calculated as follows: Sale price ($495,000) - Adjusted basis (Original cost $225,000 + Improvements $32,000 - Depreciation $55,000) - Selling costs ($5,000) = $288,000.

Henry Oldham Purchased the Office Building in Which His CPA