MH Realty, LLC sells a parcel of waterfront land and a residential condo building with an adjusted tax basis of $100,000 and 250,000, respectively for $500,000. The original purchase price MH allocated to the building was $600,000. MH has deducted $350,000 in depreciation expense. MH's realized gain is $150,000. If MH takes back a note as part of the proceeds, what is MH's gross profit percentage? A. 83.33%. B. 71.43%. C. 70.00%. D. 50.00%. E. 30.00%.
MH Realty, LLC sells a parcel of waterfront land and a residential condo building with an adjusted tax basis of $100,000 and 250,000, respectively for $500,000. The original purchase price MH allocated to the building was $600,000. MH has deducted $350,000 in depreciation expense. MH's realized gain is $150,000. If MH takes back a note as part of the proceeds, what is MH's gross profit percentage? A. 83.33%. B. 71.43%. C. 70.00%. D. 50.00%. E. 30.00%.
Chapter12: Nonrecognition Transactions
Section: Chapter Questions
Problem 21P
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Question
![MH Realty, LLC sells a parcel of waterfront land and a residential condo building with an
adjusted tax basis of $100,000 and 250,000, respectively for $500,000. The original purchase
price MH allocated to the building was $600,000. MH has deducted $350,000 in depreciation
expense. MH's realized gain is $150,000.
If MH takes back a note as part of the proceeds, what is MH's gross profit percentage?
A. 83.33%.
B. 71.43%.
C. 70.00%.
D. 50.00%.
E. 30.00%.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fc891396d-df8f-4095-9373-4070f4f7fbe2%2F9b98f074-e81f-40e6-aa77-96763cc685e4%2F5p36oon_processed.jpeg&w=3840&q=75)
Transcribed Image Text:MH Realty, LLC sells a parcel of waterfront land and a residential condo building with an
adjusted tax basis of $100,000 and 250,000, respectively for $500,000. The original purchase
price MH allocated to the building was $600,000. MH has deducted $350,000 in depreciation
expense. MH's realized gain is $150,000.
If MH takes back a note as part of the proceeds, what is MH's gross profit percentage?
A. 83.33%.
B. 71.43%.
C. 70.00%.
D. 50.00%.
E. 30.00%.
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