What is the contract price in the year of sale

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Reference no: EM131891339

Problem

On July 1, 2016, Andrea sold land held for investment to Taylor. Andrea's land had a $300,000 basis and was subject to a $150,000 mortgage. Under the contractual agreement, Taylor will pay Andrea $85,000 on the date of the sale, will assume the mortgage, and will give Andrea a note for $375,000 (plus interest at the federal rate) due the following year. What is the contract price in the year of sale?

Reference no: EM131891339

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