Winslow owns a residential rental property with an adjusted basis of $200,000 at the beginning of the current year. The county treasurer sends Winslow a tax bill payable by December 31. The bill is for real estate property taxes of $1,200 for the current calendar year and for a $6,000 special assessment for a new sewer line. On November 1, Winslow sells the property to Edwin for $225,000. As part of the sale contract, Winslow will pay the special assessment at closing and Edwin agrees to pay the realty taxes on the due date. What is Winslow's gain on the sale?

Question

Quizplus · Accepted Answer

Winslow's gain on the sale is calculated as the selling price minus the adjusted basis and any expenses related to the sale. The selling price is $225,000, the adjusted basis is $200,000, and Winslow pays the $6,000 special assessment. Therefore, the gain is $225,000 - $200,000 - $6,000 = $19,000.

Winslow Owns a Residential Rental Property with an Adjusted Basis