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Please show work 24. Installment Sales. (Obj. 6) Yvonne, a consulting engineer and cash basis taxpayer, decided to close her office and go back to
Please show work
24. Installment Sales. (Obj. 6) Yvonne, a consulting engineer and cash basis taxpayer, decided to close her office and go back to college and study business. One of her business assets was a used car that she had purchased in 2018 for $15,000. She still owed $5,000 on the car when she sold it for $10,600 on June 10, 2020. The buyer agreed to assume the $5,000 note. Further, the buyer agreed to pay $1,600 as a down payment and pay $2,000 (plus 12% interest) on June 10, 2021, and $2,000 (plus 12% interest on the remaining balance) on June DE 10, 2022. Under the MACRS rules, Yvonne had correctly taken $9,240 of depreciation on the automobile. Assume that Yvonne has no other liabilities. a. What is the realized gain to Yvonne on the sale of the automobile? b. If the realized gain is reported on the installment basis, how much and what type of gain will Yvonne report as income in 2020, 2021, and 2022? c. How much interest income will Yvonne report in 2021 and 2022 Step by Step Solution
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