Bob owns a rental property that he bought several years ago for $260,000. He has taken depreciation on the house of $37,000 since buying it. He sells it in 2019 for $290,000. His selling expenses were $12,000 for the year. What was Bob’s realized gain on the sale?

Bob’s realized gain on the sale is $55,000,

Explanation:

The first step is to find the Book Value of the Rental Property Sold.

Book Value of the Rental Property Sold.

Cost                                               $260,000

Less Accumulated Depreciation  ($37,000)

Book Value                                   $223,000

Gain or Loss on Sale = Selling Price - Cost of Sale (Book Value) - Other Selling Expenses

                                   = $290,000 - $223,000 - $12,000

                                   = $55,000

Conclusion :

Bob’s realized gain on the sale is $55,000,