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What is Russell’s realized gain on the transaction? What is Russell’s realized gain in year 0, year 1, and year 2?

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter12: Nonrecognition Transactions

Section: Chapter Questions

Problem 21P

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Question

Russell Corporation sold a parcel of land valued at $400,000. Its basis in the land was $275,000. For the land, Russell received $50,000 in cash in yar 0 and a note providing that Russell will receive $175,000 in year 1 and $175,000 in yar 2 from the buyer.

What is Russell’s realized gain on the transaction?
What is Russell’s realized gain in year 0, year 1, and year 2?

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