Problem
Jay purchased a property from Mike Mason who is going to finance the purchase. Jay is paying a total cost of $475,000 for the property. Mike purchased the land for $50,000. He later built the home; the total cost of the home was $390,000. The home had been used as a bed and breakfast inn for several years. The adjusted basis of the home at the time of the sale was $335,000. Jay was required to pay $35,000 down payment on December 31, 2021, the remaining balance will be paid over the next 25 years. Determine the gross profit percentage for this installment sale.