Mr. Brian Brock is selling his unincorporated business during 2020. Included in his assets are accounts receivable with a face value of $87,560. He and the purchaser of the business have agreed that the net realizable value of these receivables is $82,150. In 2019, he deducted a reserve for doubtful debts of $4,800. Determine the tax effect of selling these receivables for Mr. Brock, provided that he and the purchaser jointly elect under ITA 22.

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The Answer of Mr. Brian Brock is selling his unincorporated business during 2020. Included in his assets are accounts receivable with a face value of $87,560. He and the purchaser of the business have agreed that the net realizable value of these receivables is $82,150. In 2019, he deducted a reserve for doubtful debts of $4,800. Determine the tax effect of selling these receivables for Mr. Brock, provided that he and the purchaser jointly elect under ITA 22.

Mr Brian Brock Is Selling His Unincorporated Business During 2020