Carlos bought a building for $113,000 in 2010. He built an addition to the building for $26,000. In 2014, he sold it for $186,000. What was his long-term capital gain?

Question

Quizplus · Accepted Answer

The long-term capital gain is the difference between the selling price and the cost basis. The cost basis is the original purchase price plus the cost of any improvements. In this case, the cost basis is $113,000 + $26,000 = $139,000. The selling price is $186,000. Therefore, the long-term capital gain is $186,000 - $139,000 = $47,000.

Carlos Bought a Building for $113,000 in 2010