A taxpayer purchased land in 2008 for $85,000 and sold it in 2015 for $75,000 cash. The buyer also assumed the mortgage of $5,000. What is the amount of gain/loss on the sale of the land?

Question

Quizplus · Accepted Answer

The taxpayer's total amount realized from the sale is $75,000 (cash) + $5,000 (mortgage assumed) = $80,000. The original purchase price was $85,000. Therefore, the loss is $85,000 - $80,000 = $5,000.

A Taxpayer Purchased Land in 2008 for $85,000 and Sold