Bob owns a rental property that he bought several years ago for $260,000. He has taken depreciation on the house of $35,000 since buying it. He sells it in 2014 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

Bob's realized gain is calculated as the selling price minus the adjusted basis and selling expenses. The adjusted basis is the original purchase price minus depreciation. So, $290,000 (selling price) - ($260,000 (purchase price) - $35,000 (depreciation)) - $12,000 (selling expenses) = $53,000.

Bob Owns a Rental Property That He Bought Several Years