After Abby sells her property for $300,000, how much does she realize after deductions?

Prepare for the Advanced Tax Concept 175 Test with flashcards and multiple-choice questions, each offering hints and explanations. Master tax concepts for your exam!

To determine the amount Abby realizes after selling her property for $300,000, it's essential to consider any deductions that may apply to the sale. Typically, deductions in this context might include transaction costs related to the sale, such as real estate agent commissions, title insurance, transfer taxes, or any other closing costs involved in the transaction.

If we assume that Abby incurs deductions totaling $23,000 from the sale, it would look like this:

  • Sale Price: $300,000

  • Total Deductions: $23,000

  • Amount Realized: $300,000 - $23,000 = $277,000

This calculation demonstrates how the selling price is adjusted by the relevant expenses, leading to the realized amount. Thus, if Abby realizes $277,000 after accounting for the deductions, it aligns with option C. Understanding this process is integral to recognizing how transaction costs affect net proceeds from property sales.

Subscribe

Get the latest from Examzify

You can unsubscribe at any time. Read our privacy policy