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Calculate Wilson's maximum capital gains reserve in 2020. Show work in the space below.

Calculate Wilson's maximum capital gains reserve in 2020. Show work in the space below.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Wilson purchased a large piece of land on the edge of Sherwood Park in 1989 for $150,000. He sold it on March 1, 2020 to a developer for $650,000. He received a down payment of $250,000 at the time of sale. The remaining $400,000 is to be paid to him in equal annual instalments of $100,000 beginning March 1, 2021. Calculate Wilson's maximum capital gains reserve in 2020. Show work in the space below.
Transcribed Image Text:Wilson purchased a large piece of land on the edge of Sherwood Park in 1989 for $150,000. He sold it on March 1, 2020 to a developer for $650,000. He received a down payment of $250,000 at the time of sale. The remaining $400,000 is to be paid to him in equal annual instalments of $100,000 beginning March 1, 2021. Calculate Wilson's maximum capital gains reserve in 2020. Show work in the space below.
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