Question

Taxpayer sells an apartment building for $300,000. The building was purchased in 1985 for $200,000. Taxpayer has a capital gain of $100,000.

1. True.
2. False.

Answer 1

The taxpayer has a capital gain of $100,000 when selling the apartment building.

Step-by-step explanation:

The correct answer is True. When the taxpayer sells an apartment building for $300,000, and the building was purchased for $200,000, the capital gain is calculated by subtracting the purchase price from the selling price, resulting in a gain of $100,000. Capital gain is the profit made from the sale of a capital asset, such as real estate, stocks, or bonds. In this case, the taxpayer has a capital gain of $100,000.