A taxpayer purchased land in 2015 for $26,000 and sold it in 2017 for $31,000 cash.The buyer also assumed the remaining mortgage of $13,000.What is the amount recognized on the sale of the land?

Question

Quizplus · Accepted Answer

The amount recognized on the sale is the difference between the selling price and the purchase price. The selling price includes both the cash received ($31,000) and the mortgage assumed by the buyer ($13,000), totaling $44,000. The purchase price was $26,000. Therefore, the gain recognized is $44,000 - $26,000 = $18,000.

A Taxpayer Purchased Land in 2015 for $26,000 and Sold