Question

Bob owns a rental property that he bought several years ago for $260,000. He has taken depreciation on the house of $37,000 since buying it. He sells it in 2019 for $290,000. His selling expenses were $12,000 for the year. What was Bob’s realized gain on the sale?

Answer 1

Bob’s realized gain on the sale is $55,000,

Step-by-step explanation:

The first step is to find the Book Value of the Rental Property Sold.

Book Value of the Rental Property Sold.

Cost $260,000

Less Accumulated Depreciation ($37,000)

Book Value $223,000

Gain or Loss on Sale = Selling Price - Cost of Sale (Book Value) - Other Selling Expenses

= $290,000 - $223,000 - $12,000

= $55,000

Conclusion :

Bob’s realized gain on the sale is $55,000,