What are the tax consequences to michael in year of sale

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Reference no: EM132036946

Michael owns undeveloped land worth $300,000. It has a basis of $120,000 and is subject to a $60,000 mortgage. Michael sells the property to Charles, who assumes the mortgage, pays Michael $60,000 cash in the year of the sale, and gives Michael a note for $180,000 to be paid in 3 annual installments with interest at a market rate. Payments on the note begin after the year of the sale. A. What are the tax consequences to Michael in the year of the sale?

Reference no: EM132036946

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