A company purchased some land in June 1990 for $1 million. The company sold this land in January 2020 for $2.2 million. The company also had some carry forward capital losses of $200,000. What is the company's net capital gain on the sale of this land?

Question

Quizplus · Accepted Answer

The net capital gain is the difference between the sale price and the cost basis, minus any capital losses. The cost basis is the original purchase price of $1 million. The sale price is $2.2 million. The capital losses are $200,000. Therefore, the net capital gain is $2.2 million - $1 million - $200,000 = $797,000.

A Company Purchased Some Land in June 1990 for $1