Juan, not a dealer in real property, sold land that he owned. His adjusted basis in the land was $700,000 and it was encumbered by a mortgage for $100,000. The terms of the sale required the buyer to pay Juan $200,000 on the date of the sale. The buyer assumed Juan's mortgage and gave him a note for $900,000 (plus interest at the Federal rate) due in the following year. What is the gross profit percentage (gain contract price)?

a.$500/$1,200 = 41.67%.

b.$700/$1,200 = 58.33%.

c.$500/$1,100 = 45.45%.

d.$700/$1,100 = 63.64%.

e.None of these choices are correct.