Real Estate Math
A seller paid $185,000 three years ago for a property now worth $240,000. The adjusted basis after $15,000 in improvements is $200,000. What is the taxable gain?
A$40,000✓ Correct
B$55,000
C$70,000
D$25,000
Explanation
Taxable gain = Sale price - Adjusted basis = $240,000 - $200,000 = $40,000. Using the values given ($185,000, $240,000), apply the appropriate formula..
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