This general formula for determining the amount of gain on the sale of a propert

Question

This general formula for determining the amount of gain on the sale of a property which we discussed in class is the sales price minus the basis where:

A. The sales price in the total paid in cash and loans by the buyer.

B. The sales price is the total of the cash less property taxes for the prior two years.

C. The basis is the original cost plus imporvements less depreciation.

D. The sales price for loan purposes is different from the actual sales price.

E. A & C, but not B & D

F. A & B, but not D & D

Explanation / Answer

The sales price in the total paid in cash and loans by the buyer. and The basis is the original cost plus imporvements less depreciation. So gain of property is calculated by Sale price minus teh basis of teh property.

Option (A) and (C) is correct option and option (B) and (D) is incorrect.

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