Problem 17-50 (LO. 5) Jasmine owned rental real estate that she sold to her tenant...
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Problem 17-50 (LO. 5) Jasmine owned rental real estate that she sold to her tenant in an installment sale. Jasmine acquired the property in 2008 for $400,000; took $178,000 of depreciation on it; and sold it for $210,000, receiving $25,000 immediately and the balance (plus interest at a market rate) in equal payments of $18,500 for 10 years. a. What is the nature of the recognized gain or loss from this transaction? use the installment The nature of this transaction results in a 1231 loss of $ 12,000 . Jasmine will not method for this transaction, because it is only used to postpone realized gains. b. Assuming that the interest rate on the installment contract is 5%, what is the present value of the installment payments? The conversion factor for the present value of an ordinary annuity at 5% for 10 periods is 7.7217. Round your answer to two decimal places. 142,852 x
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