Jason sold a commercial building he purchased five months earlier for use in his business. His cost and adjusted basis in the building is $220,000. He incurred selling expenses of $12,000. The buyer paid $190,000 cash and assumed Jason's $80,000 mortgage on the property. What is the amount of his gain or loss, and where on Form 4797 will he report the sale? a) $38,000 gain on Part I b) $38,000 gain on Part II c) $38,000 gain on Part III d) $38,000 loss on Part II e) $38,000 loss on Part I
Jason sold a commercial building he purchased five months earlier for use in his business. His cost and adjusted basis in the building is $220,000. He incurred selling expenses of $12,000. The buyer paid $190,000 cash and assumed Jason's $80,000 mortgage on the property. What is the amount of his gain or loss, and where on Form 4797 will he report the sale? a) $38,000 gain on Part I b) $38,000 gain on Part II c) $38,000 gain on Part III d) $38,000 loss on Part II e) $38,000 loss on Part I
Chapter8: Taxation Of Individuals
Section: Chapter Questions
Problem 36P
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Transcribed Image Text:Jason sold a commercial building he purchased five months earlier for use in his
business. His cost and adjusted basis in the building is $220,000. He incurred
selling expenses of $12,000. The buyer paid $190,000 cash and assumed Jason's
$80,000 mortgage on the property. What is the amount of his gain or loss, and
where on Form 4797 will he report the sale?
a) $38,000 gain on Part I
b) $38,000 gain on Part II
c) $38,000 gain on Part III
d) $38,000 loss on Part II
e) $38,000 loss on Part I
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