Carly sold land that she purchased 10 years ago for $3,000. The selling price of the land was $7,000 and Carly paid broker's fees of $420. When she originally purchased the land, she paid $1,000 to clear some of the brush in order to make a walking path down to a nearby lake. In the ten years since the purchase, Carly paid $200 per year to keep the path maintained. Carly's amount realized on the sale was $ and her tax basis was $ resulting in a capital gain of $ for the year.

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Pamela Campos

2 March, 08:50

Carly sold land that she purchased 10 years ago for $3,000. The selling price of the land was $7,000 and Carly paid broker's fees of $420. When she originally purchased the land, she paid $1,000 to clear some of the brush in order to make a walking path down to a nearby lake. In the ten years since the purchase, Carly paid $200 per year to keep the path maintained. Carly's amount realized on the sale was $ and her tax basis was $ resulting in a capital gain of $ for the year.

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Ashlee Morrison · Answer 1

Carly's amount realized on the sale = sales price - broker's fees = $7,000 - $420 = $6,580 Carly's tax basis = purchase price + land improvements = $3,000 + $1,000 = $4,000 Carly's capital gain = net amount realized on the sale - tax basis = $6,580 - $4,000 = $2,580