Calculation of Gain or Loss, Installment Sales (LO 8.8, 8.10) Steve Drake sells a rental house on January 1, 2021, and receives $90,000 cash and a note for $55,000 at 7 percent interest. The purchaser also assumes the mortgage on the property of $30,000. Steve's original cost for the house was $172,000 on January 1, 2013 and accumulated depreciation was $32,000 on the date of sale. He collects only the $90,000 down payment in the year of sale. a. If Steve elects to recognize the total gain on the property in the year of sale, calculate the taxable gain.

Calculation of Gain or Loss, Installment Sales (LO 8.8, 8.10) Steve Drake sells a rental house on January 1, 2021, and receives $90,000 cash and a note for $55,000 at 7 percent interest. The purchaser also assumes the mortgage on the property of $30,000. Steve's original cost for the house was $172,000 on January 1, 2013 and accumulated depreciation was $32,000 on the date of sale. He collects only the $90,000 down payment in the year of sale. a. If Steve elects to recognize the total gain on the property in the year of sale, calculate the taxable gain.

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter14: Property Transactions: Determination Of Gain Or Loss And Basis Considerations

Section: Chapter Questions

Problem 29P

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