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What is chris recognized gain

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Problem 1: In 2020, Chris sold a painting to Bernie for $40,000. Chris received $10,000 in 2020 and will receive $30,000 in 2021. Chris bought the painting in 2016 for $15,000. Bernie did not pay Chris $30,000 when it was due, and after numerous attempts to collect (and $1,000 in expenses), Chris repossessed the paining in 2021. The painting was worth $45,000 when repossessed. "What is Chris's recognized gain in 2020?

a. $25,000
b. $10,000
c. $6,250

Problem 2: What are the results of the repossession to Chris?

a. $45,000 LTCG; basis = $45,000
b. $33,750 LTCG; basis = $45,000
c. $33,750 LTCG; basis = $44,000
d. $32,750 LTCG; basis = $45,000

Reference no: EM132827852

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