Real Estate Math
A Colorado investment property sold for $850,000. The original purchase price was $600,000. The owner's capital gains tax rate is 20%. Assuming a $150,000 gain after deducting improvements and depreciation recapture, what is the capital gains tax owed?
A$20,000
B$30,000✓ Correct
C$40,000
D$50,000
Explanation
Capital gains tax = Taxable Gain × Tax Rate = $150,000 × 20% = $30,000. To solve this, multiply the relevant values: $850,000 and $600,000 at 20%..
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