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14 February, 07:22

Franco converted a building from personal to business use in May 2016 when the fair market value was $72,500. He purchased the building in July 2013 for $116,000. On December 15 of this year, Franco sells the building for $58,000. On the date of sale, the accumulated depreciation on the building is $7,315. What is Franco's recognized gain or loss on the sale?

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  1. 14 February, 08:05
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    Total loss will be equal to $7185

    Explanation:

    We have given market value of the building = $72500

    He sells the building at $58000

    Accumulated depreciation = $7315

    We have to find the loss or gain

    In this case there will be loss as the market value is greater than the sell value

    So loss will be equal to

    Loss = Market value of building - sale value - accumulated depreciation

    So loss = $72500-$5800-$7315 = $7185

    So loss will be equal to $7185
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