Abby sells real property for $300,000.The buyer pays $5,000 in property taxes that had accrued during the year while the property was still legally owned by Abby.In addition, Abby pays $15,000 in commissions and $3,000 in legal fees in connection with the sale.How much does Abby realize (the amount realized) from the sale of her property?
A)$277,000
B)$282,000
C)$287,000
D)$300,000

Question

Quizplus · Accepted Answer

The amount realized from the sale of property includes the sale price minus any selling expenses and plus any amounts the buyer pays that are the seller's obligation. Here, Abby's amount realized is $300,000 (sale price) - $15,000 (commissions) - $3,000 (legal fees) + $5,000 (property taxes paid by the buyer) = $287,000.

Abby Sells Real Property for $300,000