Question
Tim sells land to Brad for $90,000. Tim originally purchased the land for $50,000. Brad agrees to pay Tim six annual installments of $15,000 each.
Tim sells land to Brad for $90,000. Tim originally purchased the land for $50,000. Brad agrees to pay Tim six annual installments of $15,000 each. In year three, Brad makes his third installment of $15,000. How much taxable gain will Tim recognize in year three?
a. $5,000
b. $6,667
c. $13,333
d. $15,000
Please show your calculations in arriving at your final answer. Thank you.
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Business Accounting An Introduction To Financial And Management Accounting
Authors: Jill Collis, Roger Hussey, Andrew Holt, Holt Collis, J. Collis
2nd Edition
0230276237, 978-0230276239
