Bob owns a rental property that he bought several years ago for $250,000.He has taken depreciation on the house of $35,000 since buying it.He sells it in 2018 for $290,000.His selling expenses are $12,000 for the year.What is Bob's realized gain on the sale?

Question

Quizplus · Accepted Answer

To calculate Bob's realized gain on the sale, we need to subtract his adjusted basis from the selling price, and then subtract any selling expenses.

Bob's adjusted basis is the original purchase price of $250,000 minus the depreciation he has taken of $35,000, which equals $215,000.

So, his realized gain on the sale is $290,000 - $215,000 = $75,000.

However, we also need to subtract the selling expenses of $12,000, which leaves us with a final realized gain of $63,000.

Therefore, the correct answer is (C).

Bob Owns a Rental Property That He Bought Several Years