Question in 2016 sam dealer sold land he had been holding, Ask an Expert

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Question: In 2016, Sam Dealer sold land he had been holding as an investment since 1990 to a buyer who paid him $1,000,000 cash, gave him diamond ring worth $100,000 and took over the responsibility for paying a mortgage of $900.000 which was transferred the land. He had acquired the property in 1984 for $500,000 and spent $100,000 on improvements. His total selling expenses (commissions, transfer taxes, etc._) were $100,000. Mr. Investor had $1,000,000 of income from other sources in 2016

a) What is the Sales Price?

b) What is the Amount Realized?

c) What is the Gain/Loss realized?

d) what is the Gain/Loss recognized?

e) what is the tax liability on the sale of the land?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M92715061

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