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 2017 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, we need to subtract the adjusted basis from the selling price. The adjusted basis is the original cost minus accumulated depreciation, which in this case is $250,000 - $35,000 = $215,000.

Selling price minus selling expenses is $290,000 - $12,000 = $278,000.

Realized Gain = Selling Price - Adjusted Basis = $278,000 - $215,000 = $63,000.

Therefore, the answer is C.

Bob Owns a Rental Property That He Bought Several Years