You purchased an apartment building for $100,000 and sold it 3 years later for $120,000. You paid 5% to the real estate agent who listed the property. How much is your realized gain?

Question

Quizplus · Accepted Answer

The realized gain is calculated by subtracting the original purchase price and the costs associated with the sale from the final sale price. The cost of the real estate agent is 5% of $120,000, which is $6,000. Therefore, the realized gain is $120,000 (sale price) - $100,000 (purchase price) - $6,000 (agent's fee) = $14,000.

You Purchased an Apartment Building for $100,000 and Sold It