A person buys rental property for $50,000, makes $20,000 in improvements, and depreciates it by $30,000. If he sells it for $80,000, his capital gain is

Question

Quizplus · Accepted Answer

Capital gain is the difference between the selling price and purchasing price. Here, the purchasing price is $40,000 and selling price is $80,000, so the capital gain is:

$80,000 - $40,000 = $40,000

Therefore, the answer is D, $40,000.

A Person Buys Rental Property for $50,000, Makes $20,000 in Improvements