A homeowner bought a property for $180,000, added a porch costing $7,000, and sold it for $220,000 with closing costs of $18,000. What is the capital gain tax?

To find the capital gain, it's important to calculate the cost basis of the property and the net sale price after closing costs.

The homeowner's initial investment includes the purchase price of the property and the cost of improvements. In this case, the purchase price is $180,000, and the cost of the porch is $7,000. This brings the total cost basis to $187,000 ($180,000 + $7,000).

Next, we determine the net sale price. The property was sold for $220,000, but the closing costs of $18,000 must be subtracted from this amount to find the actual profit from the sale. Thus, the net sale price is $202,000 ($220,000 - $18,000).

Now, to calculate the capital gain, subtract the cost basis from the net sale price: $202,000 - $187,000 equals a capital gain of $15,000.

This analysis leads us to the conclusion that the capital gain tax is based on the profit made from selling the property after accounting for all related expenses, which confirms that the correct answer is $15,000.