Jonas, an individual, acquired a building nine years ago for $650,000. He sold it in the current year for $680,000 when its adju

Question

Otrada [13]

4 years ago

7

Jonas, an individual, acquired a building nine years ago for $650,000. He sold it in the current year for $680,000 when its adju

sted basis was $500,000. Determine the amount and type of gain or loss recognized on the sale

Business

1 answer:

lakkis [162] · Answer 1 · 2021-12-19T16:38:56+03:00

Answer:

Jonas must recognize a long term capital gain = $680,000 - $500,000 = $180,000

Since this gain is originated from the sale of a property, it will be considered a capital gain. If the property was held for less than a year before it was sold it would be considered a short term capital gain, but in this case the property was held for 9 nines, therefore, it is considered a long term capital gain.