Louis sold his farm during the current taxable year.At the date of the sale,the farm had an adjusted basis of $212,000 and was encumbered by a mortgage of $190,000.The buyer paid him $110,000 in cash,agreed to take the title subject to the $190,000 mortgage,and agreed to pay him $80,000 with interest at 9 percent one year from the date of sale.How much is Louis' recognized gain on the sale?

Question

Quizplus · Accepted Answer

The Answer of Louis sold his farm during the current taxable year.At the date of the sale,the farm had an adjusted basis of $212,000 and was encumbered by a mortgage of $190,000.The buyer paid him $110,000 in cash,agreed to take the title subject to the $190,000 mortgage,and agreed to pay him $80,000 with interest at 9 percent one year from the date of sale.How much is Louis' recognized gain on the sale?

Louis Sold His Farm During the Current Taxable Year