Bob owns a rental property that he bought several years ago for $250,000. He has taken depreciation on the house of $35,000 since buying it. He sells it in 2019 for $290,000. His selling expenses are $12,000 for the year. What is Bob's realized gain on the sale?

Question

Quizplus · Accepted Answer

To calculate Bob's realized gain, we need to subtract his adjusted basis (original cost minus depreciation) and selling expenses from the selling price.

Adjusted basis = $250,000 - $35,000 = $215,000
Realized gain = $290,000 - $215,000 - $12,000 = $63,000

Bob Owns a Rental Property That He Bought Several Years