Compute tpw tax basis in the note at the end of the year

Reference no: EM132081038

Question: TPW, a calendar year taxpayer, sold land with a $535.000 tax basis for $750.000 in February. The purchaser paid $75.000 cash at closing and gave TPW an interest-bearing note for the $675.000 remaining price. In August, TPW received a $55.950 payment from the purchaser consisting of a $33, 750 principal payment and a $22.200 interest payment. In the first year after the year of sale. TPW received payments totaling $106.900 from the purchaser. The total consisted of $67.500 principal payments and $39.400 interest payments.

Compute TPW's gain recognized under the installment sale method. (Round gross profit percentage to 2 decimal places and final answer to the nearest whole dollar amount.)

Compute TPW's tax basis in the note at the end of the year. (Round gross profit percentage to 2 decimal places and intermediate calculations to the nearest whole dollar amount.)

Reference no: EM132081038

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