Sol purchased land as an investment on January 12, 2013 for $85,000. On January 31, 2019, Sol sold the land for $30,000 cash. In addition, the purchaser assumed the mortgage of $70,000 on the land. What is the amount of the realized gain or loss on the sale?

Question

Quizplus · Accepted Answer

The realized gain is calculated by subtracting the original purchase price from the total amount received from the sale. Sol received $30,000 in cash and transferred a $70,000 mortgage to the purchaser, totaling $100,000 received. Subtracting the original purchase price of $85,000 from $100,000 gives a realized gain of $15,000.

Sol Purchased Land as an Investment on January 12, 2013