Question

A homeowner originally purchased a new home for $244,900. During the period of ownership, the homeowner spent $27,000 in capital improvements. The homeowner sold the home 16 years later for $329,900. The homeowner paid a brokerage fee of 6% of the sale price and paid other closing costs totaling $2,750. What was the homeowners capital gain from the sale?

Answer 1

The answer is: $35,456

Step-by-step explanation:

Capital gains = net sale price - capital improvements - original price

• net sale price = ($329,900 x 94%) - $2,750 = $310,106 - $2,750 = $307,356
• capital improvements = $27,000
• original price = $244,900

Capital gains = $307,356 - $27,000 - $244,900

Capital gains = $35,456