Answer:
Net gain = $60,000
Explanation:
Given:
Sale value of house = $540,000
Adjusted value = $220,000
Selling expenses = $10,000
Computation of gross profit on the house:
Gross profit on sale = Sale value of house - Adjusted value - Selling expenses
Gross profit on sale = $540,000 - $220,000 - $10,000
Gross profit on sale = $310,000
Maximum limit on gain from sale of house = $250,000(Form number 1040, Schedule D)
Computation of net gain:
Net gain = $310,000 - $250,000
Net gain = $60,000
