Robert Graves sold his house to George Tombs for a total of $100,000. Earnest money of $5,000 was received at the end of the year prior to the closing. fte remaining $15,000 of the down payment was received at closing. George assumed a $50,000 mortgage on the property and signed a second mortgage for $30,000. If Robert's basis was $35,000 the tax results, in part, are as follows:

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the contract price ($5,000 + $15,000 + ($50,000 - $35,000) + $30,000) and the gross proﬁt ($100,000 -
$35,000) are the same

Robert Graves Sold His House to George Tombs for a Total