To calculate a gain or loss on the sale of an asset, the proceeds from the sale are reduced by which of the following?
A)Tax basis of the property
B)Selling expenses
C)Amount realized
D)Tax basis of the property and selling expenses
E)All of these choices are correct

Question

Quizplus · Accepted Answer

When calculating the gain or loss on the sale of an asset, the proceeds from the sale are reduced by both the tax basis of the property (i.e. the original cost of the asset plus any adjustments) and any selling expenses incurred (such as real estate commissions or advertising costs). Therefore, the correct choice is D - tax basis of the property and selling expenses.

To Calculate a Gain or Loss on the Sale of an Asset