Calculation of Long-Term Real Capital Gain on Housing

An individual purchases a house for $400,000. One year later, they sell the same house for $440,000. Assuming there are no other costs or income associated with the property, what is the capital gain on this housing investment?

Isolating Capital Gain in a Real Estate Investment

Analyzing Components of Housing Return

An investor buys a residential property for $500,000. Over the next year, the market value of the property increases to $525,000, and the investor collects $20,000 in rental income. The capital gain on this housing asset for the year is calculated by adding the $25,000 increase in market value to the $20,000 in rental income.

Match each housing investment scenario to its correct capital gain percentage for the holding period.

An investor sold a house for $525,000, realizing a capital gain of 5% for the one-year holding period. The original purchase price of the house was $______. (Enter a number only, without commas or currency symbols).

Evaluating Housing Investment Strategies

A real estate investor wants to calculate the capital gain percentage on a property they owned for one year. Arrange the following steps into the correct logical sequence to perform this calculation.

An investor is comparing the performance of two properties they owned for one year.

• Property X was purchased for $200,000 and sold for $220,000. It also generated $15,000 in rental income.
• Property Y was purchased for $500,000 and sold for $540,000. It also generated $10,000 in rental income.

Based solely on the capital gain component of return, which property performed better as a percentage of its initial price?

An individual buys a house for $250,000. One year later, the market value of the house has decreased to $240,000. During that year, the owner also received $15,000 in rental payments. Which of the following statements correctly identifies and calculates the capital gain (or loss) for this period?