Juan, not a dealer in real property, sold land that he owned.His adjusted basis in the land was $700,000 and it was encumbered by a mortgage for $100,000.The terms of the sale required the buyer to pay Juan $200,000 on the date of the sale.The buyer assumed Juan's mortgage and gave him a note for $900,000 (plus interest at the Federal rate) due in the following year.What is the gross profit percentage (gain ÷ contract price)?
A)$700/$1,100 = 63.64%.
B)$500/$1,200 = 41.67%.
C)$700/$1,200 = 58.33%.
D)$500/$1,100 = 45.45%.
E)None of these.

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The Answer of Juan, not a dealer in real property, sold land that he owned.His adjusted basis in the land was $700,000 and it was encumbered by a mortgage for $100,000.The terms of the sale required the buyer to pay Juan $200,000 on the date of the sale.The buyer assumed Juan's mortgage and gave him a note for $900,000 (plus interest at the Federal rate) due in the following year.What is the gross profit percentage (gain ÷ contract price)?
A)$700/$1,100 = 63.64%.
B)$500/$1,200 = 41.67%.
C)$700/$1,200 = 58.33%.
D)$500/$1,100 = 45.45%.
E)None of these.

Juan, Not a Dealer in Real Property, Sold Land That