In 2016,TPC Inc.sold investment land with a $474,000 book and tax basis for $775,000.The purchaser paid $100,000 in cash and gave TPC a note for the $675,000 balance of the price.In 2017,TPC received a $105,500 payment on the note ($67,500 principal + $38,000 interest).Assuming that TPC is using the installment sale method,compute its gain recognized in 2017.

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The gain recognized in 2017 is calculated by multiplying the principal payment received in 2017 ($67,500) by the gross profit percentage. The gross profit percentage is calculated as the gain on sale ($775,000 - $474,000 = $301,000) divided by the total contract price ($775,000), which is approximately 38.84%. Therefore, the gain recognized in 2017 is $67,500 * 38.84% = $26,216.