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 2016 for $290,000. His selling expenses were $12,000 for the year. What was Bob's realized gain on the sale?

Question

Quizplus · Accepted Answer

To calculate the realized gain on the sale, we need to subtract Bob's adjusted basis in the property from the selling price.

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

So Bob's realized gain is:

$290,000 (selling price) - $215,000 (adjusted basis) - $12,000 (selling expenses) = $63,000.

Therefore, the answer is C.

Bob Owns a Rental Property That He Bought Several Years