Pedro,not a dealer,sold real property that he owned with an adjusted basis of $120,000 and encumbered by a mortgage for $56,000 to Pat in 2012.The terms of the sale required Pat to pay $28,000 cash,assume the $56,000 mortgage,and give Pedro eleven notes for $12,000 each (plus interest at the Federal rate).The first note was payable two years from the date of sale and each succeeding note became due at two-year intervals.Pedro did not "elect out" of the installment method for reporting the transaction.If Pat pays the 2014 note as promised,what is the recognized gain to Pedro in 2014 (exclusive of interest)?
A)$12,000
B)$7,200
C)$4,800
D)$0
E)None of these

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The Answer of Pedro,not a dealer,sold real property that he owned with an adjusted basis of $120,000 and encumbered by a mortgage for $56,000 to Pat in 2012.The terms of the sale required Pat to pay $28,000 cash,assume the $56,000 mortgage,and give Pedro eleven notes for $12,000 each (plus interest at the Federal rate).The first note was payable two years from the date of sale and each succeeding note became due at two-year intervals.Pedro did not "elect out" of the installment method for reporting the transaction.If Pat pays the 2014 note as promised,what is the recognized gain to Pedro in 2014 (exclusive of interest)?
A)$12,000
B)$7,200
C)$4,800
D)$0
E)None of these

Pedro,not a Dealer,sold Real Property That He Owned with an Adjusted