Problem
Calculation of Gain or Loss, Installment Sales LO
Steve Drake sells a rental house on January and receives $ cash and a note for $ at percent interest. The purchaser also assumes the mortgage on the property of $ Steve's original cost for the house was $ on January and accumulated depreciation was $ on the date of sale. He collects only the $ down payment in the year of sale.
Question Content Area
a If Steve elects to recognize the total gain on the property in the year of sale, calculate the taxable gain.
fill in the blank of $
Question Content Area
b Assuming Steve uses the installment sale method, complete Form for the year of the sale.
c Assuming Steve collects $not including interest of the note principal in the year following the year of sale, calculate the amount of income recognized in that year under the installment sale method.
Round your answer to the nearest dollar.
fill in the blank of $
