In the asset scenario, what is the gain realized on sale?

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Multiple Choice

In the asset scenario, what is the gain realized on sale?

Explanation:
The gain realized on a sale is found by subtracting the asset’s adjusted basis from the amount realized in the sale. Amount realized is what you actually receive from selling the asset, after costs, while the basis is what you originally paid plus any adjustments (like improvements or depreciation). In this asset scenario, those values come out to a $200 difference, so the gain realized is $200. For example, selling the asset for $400 with an adjusted basis of $200 yields a $200 gain. The other numbers would require different sale and basis values that don’t match the scenario.

The gain realized on a sale is found by subtracting the asset’s adjusted basis from the amount realized in the sale. Amount realized is what you actually receive from selling the asset, after costs, while the basis is what you originally paid plus any adjustments (like improvements or depreciation). In this asset scenario, those values come out to a $200 difference, so the gain realized is $200. For example, selling the asset for $400 with an adjusted basis of $200 yields a $200 gain. The other numbers would require different sale and basis values that don’t match the scenario.

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