Compute the capital gain on the following: Selling price of property $200,000 Original purchase price $420,000 Selling expenses $ 14,000 Depreciation $ 20,000 Improvements $ 26,000
?Selling price $200,000
Less selling expenses $ 14,000
?
Amount realized $186,000
Cost $420,000
Less depreciation $ 20,000
Plus improvements $ 26,000
Adjusted basis $426,000
Amount realized ? Loss ($226,000)
Result is a capital loss that can be taken off any capital gains.
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Al sold a car to Ted for $4,000. One week after Ted got the car he realized that the rear window wiper did not work properly
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