Barrack sold stock on November 6, 2012 for $20,000. He received $5,000 down and $15,000 was due on January 15, 2013. He acquired the stock on January 10, 2010 for $10,000. Barrack made numerous attempts to collect the $15,000 and on April 15, 2013 he repossessed the stock. He incurred $1,000 in repossession costs and the stock was worth $14,000 when repossessed. What is Barrack's recognized capital gain (loss) on the repossession?

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Sarah's long-term capital gain on sale is $300,000 ($400,000 - $100,000). the gross proﬁt percentage is 75% ($300,000/$400,000). Sarah recognizes $60,000 long-term capital gain in 2012 (75% × $80,000). In 2013, when Sarah repossesses the land, her recognized gain on repossession is $20,000, the lesser of $20,000 ($80,000 received - $60,000 gain previously recognized) or $238,000 ($240,000 gain not yet recognized - $2,000 repossession costs).

Barrack Sold Stock on November 6, 2012 for $20,000