Final answer:
The subject in question is related to the business realm, specifically focusing on the financial implications of selling property and dealing with capital gains or losses, equity, and tax considerations. Freda's and Ben's situations illustrate the potential gains one might realize upon selling property for more than the purchase price.
Step-by-step explanation:
When considering the financial decisions involved in owning property, such as a house, a key factor to evaluate is whether to sell the property and realize a gain or loss. For example, Freda purchased a house for $150,000 and could sell it now for $250,000, which would result in a gain.
Conversely, if she needed to sell a property at a loss, she might choose to recognize that loss for tax purposes and then contribute the cash from the sale elsewhere. Similarly, Ben bought a house for $100,000 with a 20% down payment and a bank loan. The property's value has increased to $160,000, and Ben has paid off $20,000 of his bank loan, thus building equity. In his case, selling the property would also lead to a capital gain.
These scenarios are relevant to capital gains, equity growth, and potential tax implications for the shareholders or property owners involved. Understanding the implications of these financial moves is important in the realm of business and personal finance.