Abby sells real property for $300,000. The buyer pays $5,000 in property taxes that had accrued during the year while the property was still legally owned by Abby. In addition, Abby pays $15,000 in commissions and $3,000 in legal fees in connection with the sale. How much does Abby realize (the amount realized) from the sale of her property?
A) $277,000
B) $282,000
C) $287,000
D) $300,000
E) None of the above

Question

Quizplus · Accepted Answer

The amount realized is calculated as follows:
Sales Price = $300,000
Plus: Buyer paid property taxes = $5,000
Minus: Commissions = $15,000
Minus: Legal fees = $3,000
Amount Realized = $300,000 + $5,000 - $15,000 - $3,000 = $287,000. Therefore, the best choice is C.

Abby Sells Real Property for $300,000