In 2010,Helen sold property and reported her gain by the installment method.Her basis in the property was $250,000 ($400,000 cost less $150,000 of depreciation).Helen sold the property for $700,000,with $140,000 due on the date of the sale and $560,000 (plus interest at the Federal rate)due in 2011.Helen's recognized installment sale gain in 2010 is:

Question

Quizplus · Accepted Answer

To calculate the recognized installment sale gain, we need to use the following formula:

Installment sale gain = (Selling price - Adjusted basis) x Total payments received / Selling price

Using the information given in the question, we can calculate the installment sale gain as follows:

Installment sale gain = ($700,000 - $250,000) x ($140,000 + $560,000) / $700,000 = $210,000

Therefore, the recognized installment sale gain in 2010 is $210,000, which is option D.

In 2010,Helen Sold Property and Reported Her Gain by the Installment