Question - George sells unimproved real property for $60,000. He is to receive $10,000 in the year of sale and the remainder is to be paid over five (5) years plus interest. Selling expenses are $4,000. George has a basis of $8,000.
a. Calculate the amount of gain to be reported in the year of sale?
b. Calculate the gain if the property is encumbered by a mortgage of $6,000?
c. Suppose the property was encumbered by a mortgage of $17,000?