Pierre sold a parcel of land for $50,000.He received $10,000 this year and signs a contract to receive four additional payments of $10,000 each plus interest.If Pierre had a basis in the land of $10,000 and incurred $2,500 in selling expenses,what is his gross profit percentage?

Question

Quizplus · Accepted Answer

Pierre's gross profit is calculated as the selling price minus the basis and selling expenses: $50,000 - $10,000 - $2,500 = $37,500. The gross profit percentage is then the gross profit divided by the selling price: $37,500 / $50,000 = 75%.

Pierre Sold a Parcel of Land for $50,000