On July 1, 2016, Anne sells Blackacre to Bruce for 20 percent of Blackacre's gross...
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Accounting
On July 1, 2016, Anne sells Blackacre to Bruce for 20 percent of Blackacre's gross yield for each of the next 5 years with the first payment due on July 1, 2017 and the last on July 1, 2021. Anne's basis in Blackacre is $10 million.
Assuming Anne receives the following payments from Bruce pursuant to the July 1, 2016 sales agreement:
Year Payment
2017 2,300,000
2018 1,750,000
2019 2,150,000
2020 1,800,000
2021 2,050,000
What is the amount of gain or loss to be recognized by Anne in each of the five years (2017 through 2021)?
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