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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?

Respuesta :

Answer:

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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