John sold an apartment building for $600,000.His basis in the building was $360,000 subject to $30,000 of depreciation recapture.John received $150,000 in the year of sale, the buyer assumed John's mortgage payable of $240,000, and the buyer gave John an 8% (the current Federal rate) note of $210,000 due in five years.The interest on the note was payable each June 30 beginning in the year following the year of the sale.John incurred $30,000 of selling expenses which he paid for in the year of sale.Compute John's installment sales gain that should be reported in the year of sale.

Question

Quizplus · Accepted Answer

The Answer of John sold an apartment building for $600,000.His basis in the building was $360,000 subject to $30,000 of depreciation recapture.John received $150,000 in the year of sale, the buyer assumed John's mortgage payable of $240,000, and the buyer gave John an 8% (the current Federal rate) note of $210,000 due in five years.The interest on the note was payable each June 30 beginning in the year following the year of the sale.John incurred $30,000 of selling expenses which he paid for in the year of sale.Compute John's installment sales gain that should be reported in the year of sale.

John Sold an Apartment Building for $600,000