Question

TPW, a calendar year taxpayer, sold land with a $535,000 tax basis for $750,000 in February. The purchaser paid $75,000 cash at closing and gave TPW an interest-bearing note for the $675,000 remaining price. In August, TPW received a $55,950 payment from the purchaser consisting of a $33,750 principal payment and a $22,200 interest payment. In the first year after the year of sale, TPW received payments totaling $106,900 from the purchaser. The total consisted of $67,500 principal payments and $39400 interest payments a. Compute TPW's gain recognized under the installment sale method. b. Compute TPW's tax basis in the note at the end of the year

Answer 1

elw Hon Under the tallment A) Compute TPW's gain 氕earni 8a Method o principal next X28.67% 19352 ain heconn Explanation :- 수え15000 aagn gealized ÷ 50000 Cerhact price- 08.61 Cazh ㅋ 5000 615 00 o 50000 535000 Puncha s Note Aduyleà bast 25000 b Cl Tews Tas hasie t he note t the end . face value at note at end 업 Yeax : 611250- 67500 Paarn ent= 후573750 D們.ud aan :-

Reai zed ain 215 000 5053 C, 6461 Recoant-zed qain TrW's tax bast〈 in the Note 40928I 33a5 o 3) Cash receved ea Sales Cash at cosan 5000 33 50 108350 X 0-286a 31 171