Question

What is the capital gain of Taxpayer who sells an apartment building for $300,000 that was purchased in 1993 for $200,000 and depreciated by $90,000?

A. $0
B. $100,000
C. $190,000
D. $290,000

Answer 1

The capital gain of the taxpayer who sells an apartment building for $300,000 that was purchased in 1993 for $200,000 and depreciated by $90,000 is $0.

Step-by-step explanation:

To calculate the capital gain, we need to subtract the cost basis (the original purchase price plus any improvements) and the accumulated depreciation from the selling price. In this case, the selling price is $300,000, the cost basis is $200,000, and the depreciation is $90,000.

So, the capital gain = Selling price - Cost basis - Depreciation.

Using the given values, the capital gain would be $300,000 - $200,000 - $90,000 = $10,000.

Therefore, the correct answer is A. $0.