Individual A purchased an apartment building for $200,000 in cash, and also assumed an existing mortgage of $800,000. A paid $15,000 to obtain title insurance, and he paid legal fees of $5,000. He kept the building for 3 years, then sold it. Each year he owned it, A took a depreciation deduction, where the depreciation amount is computed based upon a straight-line, 30 year life. Immediately before A sold it, he replaced the roof, for a cost of $50,000, and repaired broken windows for $3,000. He then sold the building for cash of $300,000, and the buyer assumed his mortgage of $700,000. A split a total real estate broker fee of $20,000, equally with the buyer. 

What was A's taxable gain or loss?

Answer rating: 100% (QA)

To calculate As taxable gain or loss we need to determine the adjusted basis of the property and subtract it from the selling price Initial Basis As i... View the full answer