Greg sold an apartment building he owned for 20 years. He paid $100,000 for it, and made $300,000 worth of improvements. His depreciation was $2,500 per year. He sold the building for $1,000,000 and paid $60,000 in commission to the broker. What is Greg’s capital gain on the apartment?/search?q=Which+Californi a+Fair+Housing+Law+prohibits+discri mination+based+on+sexual+orientatio n+or+source+of+income&oq=Which+ California+Fair+Housing+Law+prohibi ts+discrimination+based+on+sexual+o rientation+or+source+of+income& aqs=chrome..69i57j69i60.525j0j4& ;sourceid=chrome&ie=UTF-8

Greg’s capital gain on the apartment = $590,000

Explanation:

Purchase Cost = $100,000

Improvements = $300,000

Total Initial cost = Purchase Cost + Improvements

Total Initial cost = $100,000 + $300,000

Total Initial cost = $400,000

Depreciation for 20 Years = Depreciation per annum * 20

= $2,500 * 20

= $50,000

Net Book value after 20 Years = Initial cost - Depreciation for 20 Years

= $400,000 - $50,000

= $350,000

Capital Gain = Net Sale - Net Book Value

When Net Sale = Sale Price - Commission

= $1,000,000 - $ 60,000

= $940,000

Hence, Capital Gain = Net Sale - Net Book Value

Capital Gain = $940,000 - $350,000

Capital Gain = $590,000

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