Gross profit to be recognized in the current year

Question

Problem:

Kyle sold land on the installment basis for $100,000. His basis in the land was $70,000. Kyle received a $40,000 down payment and a real estate installment sale contract calling for $60,000 in additional payments in future years. In addition, Kyle paid $6,000 in commissions on the sale.

Task:

Question: What is the gross profit to be recognized in the current year?

• $0
• $9,600
• $12,000
• 30,400

Note: Please show the work not just the answer.