W sold a parcel of land that he had owned for three years for $4,000 cash, and the buyer assumed a note secured by the property in the amount of $6,000.W originally paid $7,500 for the land.What is his gain (or loss) realized on the sale?

Question

Quizplus · Accepted Answer

To calculate the gain or loss, we need to subtract the original cost of the property from the selling price and then subtract any other selling expenses, such as closing costs or real estate commissions. In this case, there is no mention of any other selling expenses, so we can assume there were none.

Selling price = $4,000 (cash) + $6,000 (assumed note) = $10,000
Original cost = $7,500
Gain = $10,000 - $7,500 = $2,500

Therefore, the answer is C, $2,500.

W Sold a Parcel of Land That He Had Owned