Which of the following is how gain or loss realized is calculated?
A)Cash less selling costs.
B)Cost basis less cost recovery.
C)Cash less cost recovery.
D)Amount realized less adjusted basis.
E)None of the choices are correct.

Question

Quizplus · Accepted Answer

Gain or loss realized is calculated as the amount realized from the sale or disposition of property, less the adjusted basis of the property. This is known as the realized gain or loss. The amount realized is the total amount received from the sale or disposition, including any money or property received, as well as any debts or liabilities assumed by the buyer. The adjusted basis of the property is generally the original cost of the property, increased by any improvements or additions to the property, and decreased by any depreciation or other deductions claimed. Therefore, the correct calculation is: amount realized - adjusted basis = realized gain or loss.

Which of the Following Is How Gain or Loss Realized