Mr. and Mrs. Swift purchased their home 15 years ago for $32,500. During their ownership, they made capital improvements totaling $19,400. They sold the home for $72,900. What amount of gain did they make on the sale?
Solution step 1: Purchase Price Plus Improvements = Basis
Calculation: $32,500 + $19,400 = $51,900 Basis
Solution Step 2: Selling Price less Basis = Gain/Profit
Calculation: $72,900 less $51,900 = $21,000 Gain/Profit
Answer: $21,000 gain/Profit