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1 November, 13:30

Antonio owns land held for investment with a basis of $28,000. The city of Lafayette exercises the right of eminent domain and Antonio receives a payment of $48,000. What is Antonio's realized gain?

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  1. 1 November, 17:10
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    B) $20,000

    Explanation:

    Antonio's realized gain = payment received - land basis = $48,000 - $28,000 = $20,000

    When a city government exercises the right of eminent domain it will take possession of private property. The Fifth Amendment authorizes this practice only if the owner is given a just compensation for their loss.
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