John's basis in the painting in problem 67 is:

a. \(\$ 0\)

b. \(\$ 25,000\)

c. \(\$ 30,000\)

d. \(\$ 39,000\)

e. \(\$ 42,250\)

problem 67

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. \(\$ 39,000\)