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Bob sells investment property in the city for $1.2 million in which he has a basis of $300,000 to Sue. Sue pays Bob $240,000 in cash and gives him a promissory note for $960,000 for the balance owed in the purchase. In the installment payment that is made the next year by Sue, she pays Bob a payment of which $48,000 is principal. How much gain must Bob recognize with respect to this payment? a. $48,000 b. $0 c. $12,000 d. $36,000 e. $22,500.

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Accounting Basics, Accounting

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