The term "amount realized" refers to the total amount of money received from a sale or transaction. The spelling of this phrase can be broken down phonetically as /əˈmaʊnt/ /rɪəlaɪzd/. The first part, "amount," is pronounced with a schwa sound in the first syllable, followed by the diphthong "ou" and the nasal /nt/ consonant cluster. The second part, "realized," begins with the stressed syllable "rea," followed by the unstressed syllable "lized" pronounced as "lized" with a voiced /z/ sound at the end.
Amount realized is a financial term that refers to the total proceeds or funds received from a transaction or investment after any expenses or deductions have been taken into account. It is commonly used in the context of selling an asset, such as real estate, stocks, or businesses.
In essence, the amount realized represents the net amount of money or value gained from a sale or exchange. It includes the actual cash received as well as the fair market value of any non-cash assets or services received in exchange for the asset. However, it should be noted that the amount realized does not include any outstanding debts or liabilities that may exist.
When calculating the amount realized, several factors are taken into consideration. These include the sale price or value of the asset, any fees or commissions paid to intermediaries or agents, transaction costs, and any adjustments or allowances made for trade-ins or exchanges.
Understanding the amount realized is crucial for determining the taxable consequences of a transaction. In many cases, it forms the basis for calculating capital gains or losses, which are subject to taxation. By subtracting the original cost or basis of the asset from the amount realized, the taxable gain or loss can be determined.
Overall, the amount realized provides a comprehensive measure of the financial outcome of a transaction and serves as a basis for assessing the profitability or impact of an investment or sale.
The word "amount" can be traced back to the Latin word "amontare", which means "to mount up" or "to rise".It derived from the combination of the prefix "ad-" meaning "to" or "towards" and "montare" meaning "to mount".
The term "realize" comes from the Latin word "realis", meaning "actual" or "genuine". It evolved from the combination of "res", meaning "thing" or "object", and "alizare", meaning "to make into" or "to become".
When these two words are combined, "amount realized" refers to the actual or total value or sum that has been achieved or obtained. It is commonly used in financial and business contexts to indicate the total amount of money received or gained from a particular transaction or investment.