Real Estate Math

A Wyoming investor purchased a rental home for $175,000 and made $25,000 in improvements. They sell the property for $265,000 and pay a 5% commission. What is the gain before taxes?

A$51,750✓ Correct
B$52,250
C$78,250
D$65,000

Explanation

Total cost basis = $175,000 + $25,000 = $200,000. Commission = $265,000 × 5% = $13,250. Net proceeds = $265,000 − $13,250 = $251,750. Gain = $251,750 − $200,000 = $51,750.

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