1 kyle sold land on the installment basis for 100000 his

Assignment Help Taxation

Reference no: EM13376596

1. Kyle sold land on the installment basis for $100,000. His basis in the land was $70,000. Kyle received a $40,000 down payment and a real estate installment sale contract calling for $60,000 in additional payments in future years. In addition, Kyle paid $6,000 in commissions on the sale. What is the gross profit to be recognized in the current year?

$0, B. $9,600, C. $12,000, D. $30,000

2 Kevin sold property with an adjusted basis of $58,000. The buyer assumed Kevin's existing mortgage of $40,000 and agreed to pay an additional $60,000 consisting of a cash down payment of $40,000, and payments of $4,000, plus interest, per year for the next 5 years. Kevin paid selling expenses totaling $2,000. What is Kevin's gross profit percentage?

A. 33 1/3%, B. 40%, C. 60%, D. 66 2/3%

3. On May 18, of last year, Carter sells unlisted stock with a cost of $24,000 for $60,000. Carter collects $20,000 initially and is scheduled to receive $10,000 each year for four years starting this year plus an acceptable rate of interest. After receiving the scheduled payment this year, Carter is unable to collect any further payments. After incurring legal fees of $1,000, Carter recovers a portion of the stock valued at $26,000. As a result of the repossession, Carter must report

A. ordinary income of $9,000, B. Capital gain of $9,000, C. ordinary income of $13,000

D. capital gain of $13,000

All of the following transactions are exempt from rules regarding imputed interest with the exception of

taxpayer purchases newly issued bond for $700 (face value of $1,000)

taxpayer sells land for $135,000 with payment due in 5 years and no stated interest

taxpayer sells his home gym equipment for $2,800 with payment due in one year and no stated interest

taxpayer purchases sailboat costing $2,500 for week-end boating trips; full price payable in five months and no stated interest

Reference no: EM13376596

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