1) Kyle sold land on the installment basis for

$100,000. His basis in the land was $70,000. Kyle received a

$40,000 down payment and a real estate installment sale contract

calling for $60,000 in additional payments in future years. In

addition, Kyle paid $6,000 in commissions on the sale. What is the

gross profit to be recognized in the current year?

a) $0

b) $9,600

c) $12,000

d) 30,400

2) Kevin sold property with an adjusted basis of

$58,000. The buyer assumed Kevin's existing mortgage of $40,000 and

agreed to pay an additional $60,000 consisting of a cash down

payment of $40,000, and payments of $4,000, plus interest, per year

for the next 5 years. Kevin paid selling expenses totaling $2,000.

What is Kevin's gross profit percentage?

a) 33 1/3%

b) 40%

c) 60%

d) 66 2/3%

3) On May 18, of last year, Carter sells unlisted stock with a cost

of $24,000 for $60,000. Carter collects $20,000 initially and is

scheduled to receive $10,000 each year for four years starting this

year plus an acceptable rate of interest. After receiving the

scheduled payment this year, Carter is unable to collect any

further payments. After incurring legal fees of $1,000, Carter

recovers a portion of the stock valued at $26,000. As a result of

the repossession, Carter must report

a) ordinary income of $9,000.

b) capital gain of

$9,000.

c)ordinary income of

$13,000.

d)capital gain of

$13,000.

4) All of the following transactions are exempt from

rules regarding imputed interest with the exception

of:

a)taxpayer purchases newly issued bond for $700

(face value of $1,000)

b)taxpayer sells land for $135,000 with payment

due in 5 years and no stated interest

c)taxpayer sells his home gym equipment for

$2,800 with payment due in one year and no stated

interest

d)taxpayer purchases sailboat costing $2,500

for week-end boating trips; full price payable in five months and

no stated interest