Kong originally sold his home for $96,000. At that time, his adjusted basis in the home was $99,000. Five years later, he repossessed the home when the balance of the note was $91,000. He resold it within one year for $105,000. Original sale expenses were $1,250, and resale expenses were $1,550. Repossession costs were $3,000. He incurred $1,000 for improvements prior to the resale. What is Kong's recomputed gain? a. $4,200 b. $6,800 c. $11,000 d. $14,000
Kong originally sold his home for $96,000. At that time, his adjusted basis in the home was $99,000. Five years later, he repossessed the home when the balance of the note was $91,000. He resold it within one year for $105,000. Original sale expenses were $1,250, and resale expenses were $1,550. Repossession costs were $3,000. He incurred $1,000 for improvements prior to the resale. What is Kong's recomputed gain? a. $4,200 b. $6,800 c. $11,000 d. $14,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Kong originally sold his home for $96,000. At that time, his adjusted
basis in the home was $99,000. Five years later, he repossessed the
home when the balance of the note was $91,000. He resold it within
one year for $105,000. Original sale expenses were $1,250, and resale
expenses were $1,550. Repossession costs were $3,000. He incurred
$1,000 for improvements prior to the resale.
What is Kong's recomputed gain?
a. $4,200
b. $6,800
c. $11,000
d. $14,000
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