John sold a painting in February 2018 for ($ 40,000). He received ($ 10,000) in February and

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John sold a painting in February 2018 for \(\$ 40,000\). He received \(\$ 10,000\) in February and was to receive \(\$ 15,000\) in 2019 and 2020 , plus interest. He purchased the painting in 2007 for \(\$ 15,000\), and its basis at time of sale was \(\$ 15,000\). The buyer defaulted on the obligation on January 1 , 2019, and John repossessed the painting. He incurred no costs to repossess the painting, and its fair market value at repossession date was \(\$ 39,000\). John's recognized gain on the repossession is:

a. \(\$ 6,250\)

b. \(\$ 11,250\)

c. \(\$ 25,000\)

d. \(\$ 27,750\)

e. \(\$ 39,000\)

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CCH Federal Taxation 2019 Comprehensive Topics

ISBN: 9780808049081

2019 Edition

Authors: Ephraim P. Smith, Philip J. Harmelink, James R. Hasselback

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