On January 21, 2016, Asia sold a residential rental condominium that she had pur

Question

On January 21, 2016, Asia sold a residential rental condominium that she had purchased and put into service in March 2012. Her gain on the sale was $10,000 and the depreciation allowed or allowable was $15,635. Asia didn't sell any other residential real property in this year. Before considering the sale, Asia is in the 25% tax bracket. What is the amount and nature of the gain or loss?

$15,635 gain taxed at a maximum of 25%.

$15,635 gain taxed at a maximum of 15%.

$10,000 gain taxed at a maximum of 25%.

$10,000 gain taxed at a maximum of 15%.

On January 21, 2016, Asia sold a residential rental condominium that she had purchased and put into service in March 2012. Her gain on the sale was $10,000 and the depreciation allowed or allowable was $15,635. Asia didn't sell any other residential real property in this year. Before considering the sale, Asia is in the 25% tax bracket. What is the amount and nature of the gain or loss?

Explanation / Answer

Gain realized on sale of residential rental condominium will be taxed at 25% as it was maximum rate as it was real estate business sale.

So answer is $ 10,000 Gain taxed at a maximum rate of 25%

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