John sold a painting on November 8, 2011 for $100,000. He acquired the painting for $30,000 on May 16, 2001. He received $40,000 down and $30,000 on June 20, 2012 and June 10, 2013. He sold the installment obligation for $20,000 on January 15, 2013. What is John's recognized gain (loss) on the sale of the installment obligation?

Question

Quizplus · Accepted Answer

the $60,000 depreciation must be reported in the year of sale
 the gross proﬁt is $200,000, which equals the selling price - (adjusted basis + depreciation taken) = $300,000 - ($40,000 + $60,000). the contract price is $270,000, which equals the greater of the gross proﬁt ($200,000) or selling price minus liability assumed by the buyer ($270,000). the gross proﬁt percentage equals the gross proﬁt/contract price = $200,000/$270,000 = 74%.

John Sold a Painting on November 8, 2011 for $100,000 $$1,000 Long-Term Capital Loss C) $11,000 Long-Term Capital Gain D)

John Sold a Painting on November 8, 2011 for $100,000 $$1,000 Long-Term Capital Loss
C) $11,000 Long-Term Capital Gain
D)