Question

I sold an old car I'd had for decades. I bought it for $2,000. It sold for $10,000. I also sold a Motorcycle I had for a very long time. I bought it for $1,000. I sold it for $800 just to save space.

What is my net capital gains?
A $8,000
B. $7,800
C. $200
D. $12,000

Answer 1

B

Explanation:

Profit/gains on car = Selling Price - Buying price = 10000 - 2000 = $8000

Profit/gains on motorcycle = SP - BP = 800 - 1000 = $ - 200 (because it's negative, its actually not a gain but a loss, so the loss on motorcycle = $ 200 and profit/gains will be negative)

Total gains = 8000 - 200 = $7800

Answer 2

B because it you subtract 10000-2000 you get 8000 but you subtract 1000-800 and get 200 so you have to subtract 8000-200 because your losing some money