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On January 30 2015 Amy sells land to Bob for a stated price of $200000 The full $200,000 is payable on January 30 2017 No interest is stated Amy a cash-method taxpayer purchased the land in


On January 30, 2015, Amy sells land to Bob for a stated price of $200,000. The full $200,000 is payable on January 30, 2017. No interest is stated. Amy, a cash-method taxpayer, purchased the land in 2010 for $130,000.

a. How much interest income must be reported by Amy on the sale? Assume a 9% rate compounded semiannually. The present value factor is 0.83856.

b. In what year is the interest reported?

c. How much gain is reported by Amy on the sale?

d. In what year is the gain reported?

e. What is Bob’s basis in the land?

Apr 01 2020 View more View Less

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