If capital gains tax must be paid,the opportunity cost of selling increases relative to the opportunity costs of keeping the property.

Question

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When capital gains tax must be paid, the seller would have to pay a certain amount of their profit to the government. This increases the opportunity cost of selling because it reduces the net income gained from the sale. Consequently, it may become relatively more costly to sell the property compared to keeping it, especially if the potential gains from the sale are not significant enough to offset the tax expenses.

If Capital Gains Tax Must Be Paid,the Opportunity Cost of Selling