31 George sells property to Tom under an installment sale for $100,000 Georges basis in the property is $75,000 Payments of $20,000 plus interest of 1 of the remaining principal balance (assume adequate) will be paid each year for 5 years After the first year, a payment of $21,000 ($20,000 principal payment plus $1,000 interest payment) is made by Tom to George Assume any capital gain on the sale is long term capital gain How much of the first payment is treated as capital gain $1,000 $5,000 $15,000 $20,000 32 George sells property to Tom under an installment sale for $100,000 Georges basis in the property is $75,000 Payments of $20,000 plus interest of 1 of the remaining principal balance (assume adequate) will be paid each year for 5 years After the first year, a payment of $21,000 ($20,000 principal payment plus $1,000 interest payment) is made by Tom to George Assume any capital gain on the sale is long term capital gain How much of the first payment is treated as basis recovery $1,000 $5,000 $15,000 $20,000

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31. George sells property to Tom under an installment sale for $100,000. Georges basis in the property is $75,000. Payments of $20,000 plus interest of

31. George sells property to Tom under an installment sale for $100,000. Georges basis in the property is $75,000. Payments of $20,000 plus interest of 1% of the remaining principal balance (assume adequate) will be paid each year for 5 years. After the first year, a payment of $21,000 ($20,000 principal payment plus $1,000 interest payment) is made by Tom to George. Assume any capital gain on the sale is long-term capital gain. How much of the first payment is treated as capital gain?

$1,000
$5,000
$15,000
$20,000

32. George sells property to Tom under an installment sale for $100,000. Georges basis in the property is $75,000. Payments of $20,000 plus interest of 1% of the remaining principal balance (assume adequate) will be paid each year for 5 years. After the first year, a payment of $21,000 ($20,000 principal payment plus $1,000 interest payment) is made by Tom to George. Assume any capital gain on the sale is long-term capital gain. How much of the first payment is treated as basis recovery?