Problem 9 Capital Gains Reserves

Ms. Helm acquired a tract of land near Ottawa 5 years ago. It cost $87,000. On July 1, 2019, the tract of land is sold for $106,000. The terms of the sale require a down payment of $32,000. No further payment on the principal amount is required for five years.

Required: Determine the amount of the minimum taxable capital gain that will have to be included in Ms. Helms Net Income For Tax Purposes for both 2019 and 2020. a. 2019 Minimum Taxable Capital Gain _______________________

b. 2020 Minimum Taxable Capital Gain _________________________