Question

A property with a taxable basis of $285,750 is sold for $620,500. The seller paid out $7,525 in fees to facilitate the sale. What is the taxable capital gain from the sale?

(Sale Price - Selling Expenses = Profit from Sale) (Profit from Sale - Taxable Basis = Capital Gain)

Answer 1

The taxable capital gain from the sale is $327,225.

Step-by-step explanation:

The taxable basis is the value at which the property is assessed for tax purposes. In this case, the taxable basis is $285,750.

The seller sold the property for $620,500 and paid $7,525 in fees. To calculate the profit from the sale, we subtract the selling expenses from the sale price:

$620,500 - $7,525 = $612,975

Next, we subtract the taxable basis from the profit from the sale to find the taxable capital gain:

$612,975 - $285,750 = $327,225

Therefore, the taxable capital gain from the sale is $327,225.