Question

For the scenario described (e. None of these choices are correct), what is the recognized gain when the amount realized is $21,000 and the adjusted basis is $12,000?

A) Recognized gain: $21,000
B) Recognized gain: $12,000
C) Recognized gain: $9,000
D) No recognized gain

Answer 1

The recognized gain is the amount realized from the sale minus the adjusted basis. In this case, the recognized gain is $9,000 after subtracting the adjusted basis of $12,000 from the amount realized of $21,000.

Step-by-step explanation:

To calculate the recognized gain, you subtract the adjusted basis of an asset from the amount realized upon its sale. In the scenario described, if the amount realized is $21,000 and the adjusted basis is $12,000, the recognized gain is:

$21,000 (amount realized) - $12,000 (adjusted basis) = $9,000 (recognized gain).

Therefore, the correct answer is C) Recognized gain: $9,000.