On January 1st of this year, Linda sold a piece of land that she had bought years earlier to George. Linda's basis in the land was $75,000 and she sold it for $100,000. It was agreed that George would pay Linda $10,000 as a down payment and would make installment payments of $15,627.65 for the next 9 years including 10% interest. His first installment payment was due and payable December 31st of this year. Linda is NOT a dealer in real estate. What is Linda's tax consequence of this transaction this year?
$2,500 of ordinary income.
$2,750 of long-term capital gain.
$2,500 of long-term capital gain and $9,000 of ordinary income.
$4,156.91 of long-term capital gain and $9,000 or ordinary income.