Ruth sold land she purchased three months earlier for use in her business. Her cost and adjusted basis in the land is $75,000. She incurred selling expenses of $5,000. The buyer paid $80,000 cash and assumed Ruth's $25,000 mortgage on the property. What is the amount of her gain, and where on Form 4787 will she report the sale? a) $25,000 on Part I b) $25,000 on Part II c) $30,000 on Part III d) $30,000 on Part IV
Ruth sold land she purchased three months earlier for use in her business. Her cost and adjusted basis in the land is $75,000. She incurred selling expenses of $5,000. The buyer paid $80,000 cash and assumed Ruth's $25,000 mortgage on the property. What is the amount of her gain, and where on Form 4787 will she report the sale? a) $25,000 on Part I b) $25,000 on Part II c) $30,000 on Part III d) $30,000 on Part IV
Chapter16: Property Transactions: Capital Gains And Losses
Section: Chapter Questions
Problem 12CE
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Transcribed Image Text:Ruth sold land she purchased three months earlier for use in her business.
Her cost and adjusted basis in the land is $75,000. She incurred selling
expenses of $5,000. The buyer paid $80,000 cash and assumed Ruth's
$25,000 mortgage on the property. What is the amount of her gain, and
where on Form 4787 will she report the sale?
a) $25,000 on Part I
b) $25,000 on Part II
c) $30,000 on Part III
d) $30,000 on Part IV
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