Noah sold investment land for $70,000 cash and the buyer's assumption of Noah's $30,000 mortgage on the property.Noah paid a realtor's commission of $2,800 on the sale.What is Noah's realized gain if the land has an adjusted basis of $57,000?
A)$43,000
B)$40,200
C)$13,000
D)$10,200

Question

Quizplus · Accepted Answer

Noah's realized gain is calculated by subtracting the adjusted basis of the land ($57,000) from the total amount realized from the sale. The total amount realized includes the cash received ($70,000) and the mortgage assumed by the buyer ($30,000), totaling $100,000. After subtracting the realtor's commission ($2,800), the net amount realized is $97,200. Subtracting the adjusted basis ($57,000) from this amount gives a realized gain of $40,200.

Noah Sold Investment Land for $70,000 Cash and the Buyer's