Property Valuation
A property purchased for $280,000 with improvements costing $45,000 was sold 2 years later for $370,000. What is the total gain?
A$90,000
B$45,000✓ Correct
C$38,250
D$125,000
Explanation
Total cost basis = $280,000 + $45,000 = $325,000. Gain = $370,000 − $325,000 = $45,000. Using the values given ($280,000, $45,000), apply the appropriate formula.. The correct answer is $45,000.. This is a common calculation on the Alabama real estate exam.
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