In 2015,Beth sold equipment used in her business.Her basis in the property was $300,000 ($500,000 cost less $200,000 of depreciation).Beth sold the property for $400,000,with $100,000 due on the date of the sale and $300,000 (plus interest at the Federal rate) due in 2016.Beth's recognized gain from the installment sale in 2015 is:

Question

Quizplus · Accepted Answer

Beth's recognized gain from the sale is calculated as follows:

Sale price: $400,000 
Basis: -$300,000 
 = Gain: $100,000

Since this is an installment sale, Beth will only recognize a portion of the gain in 2015. The amount she recognizes is equal to the down payment she received on the sale, which is $100,000. Therefore, the answer is choice C.

In 2015,Beth Sold Equipment Used in Her Business