Steve sells property with a basis of $80,000 to Bob for a selling price of $150,000. As part of the purchase price, Bob agrees to assume a $50,000 mortgage on the property and pay the remaining $100,000 in 10 equal annual installments together with adequate interest. - The contract price is $100,000 ( $150,000 selling price - $50,000 mortgage). - The gross profit is $70,000 ( $150,000 selling price - $80,000 basis). - The gross profit ratio is 70% ( $70,000 gross profit $100,000 contract price). Thus, of each payment is reported as gain from the sale. $10,000,$100,000 $7,000,$10,000 $7,000,$100,000 $10,000,$70,000