Equity is best described as:

Equity represents the ownership value of a property after subtracting any liabilities associated with it, specifically secured debts such as mortgages. When assessing equity, you take the current market value of the property and deduct any outstanding amounts owed on loans or mortgages. This measure of equity is an important concept in real estate, as it reflects the true net worth of the property to the owner.

For instance, if a home is valued at $300,000 and there is a remaining mortgage balance of $200,000, the equity in the home would be $100,000. This amount indicates the owner's stake in the property and can be crucial for financial planning, investment decisions, or when considering selling the property.

Other options refer to different financial concepts: the monthly mortgage payment relates to how payments contribute toward the principal, taxable gain pertains to the profits that are subject to taxation upon selling, and profit realized in sales refers to income from transactions rather than ownership value. Understanding equity is fundamental for property owners as it directly relates to their financial position regarding their real estate assets.