Question
Question 24. 24. (TCO 2) Pedro, not a dealer, sold real property that he owned with an adjusted basis of $60,000 and encumbered by a
Question 24. 24. (TCO 2) Pedro, not a dealer, sold real property that he owned with an adjusted basis of $60,000 and encumbered by a mortgage for $28,000 to Pat in 2010. The terms of the sale required Pat to pay $14,000 cash, assume the $28,000 mortgage, and give Pedro eleven notes for $6,000 each (plus interest at the federal rate). The first note was payable two years from the date of sale, and each succeeding note became due at 2-year intervals. Pedro did not elect out of the installment method for reporting the transaction. If Pat pays the 2013 note as promised, what is the recognized gain to Pedro in 2012 (exclusive of interest)? (Points : 6) |
$6,000 $3,600 $2,400 $0 None of the above
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started