Required: Indicate the tax effects of these transactions on Natasha's Net Income For Tax Purposes for the years 2016,2017 and 2018. assuming:

A. that the down payment was equal to 10 percent of the sales price.

B. that the down payment was equal to 30 percent of the sales price.

Several years ago, Ms. Natasha Simone acquired an existing building to be used in her unincorporated business. The total cost of the property was $1,200,000, with $250,000 of this amount representing the estimated fair market value of the land on which the building was situated. Natasha has suffered from serious bouts of depression in the past and realized that the stress from running her business was putting her mental health in risk. As a consequence, she decides she must stop operations and sell the assets of the business. On January1, 2016, the building that was used in the business was sold for $1,500,000, with $300,000 of this amount representing the estimated fair market value of the land on which the building was situated. The January 1, 2016 UCC balance in Class 1 was $790,742. The building was the only asset in this Class. The terms of the sale require the buyer to make a down payment at the time of purchase, with the remaining balance payable on January 1, 2018. No payments are required in 2017. Interest on the outstanding balance is paid on December 31 at an annual rate of 6%. Natasha plans to use reserves to defer the payment of taxes on the capital gain which results from this sale