Ashley sells real property for $280,000.The buyer pays $4,000 in property taxes that had accrued during the year while the property was still legally owned by Ashley.In addition, Ashley pays $14,000 in commissions and $3,000 in legal fees in connection with the sale.How much does Ashley realize (the amount realized) from the sale of her property?
A)$259,000.
B)$263,000.
C)$267,000.
D)$280,000.
E)None of the above.

Question

Quizplus · Accepted Answer

Amount realized = Selling price - Selling expenses
Selling price = $280,000
Selling expenses = Property taxes + Commissions + Legal fees
Selling expenses = $4,000 + $14,000 + $3,000 = $21,000
Amount realized = $280,000 - $21,000 = $259,000
Therefore, the amount realized from the sale of property is $259,000.

Ashley Sells Real Property for $280,000