Barbara sold land she purchased three months earlier for use in her business. Her cost and adjusted basis in the land prior to the sale were $80,000. She also incurred $10,000 in expenses related to the sale. The buyer paid $80,000 cash and assumed Barbara's $20,000 mortgage on the property. What is the amount of Barbara's gain, and where on Form 4797 will she report the sale?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Barbara sold land she purchased three months earlier for use in her business. Her cost and adjusted basis in the land prior to the sale were $80,000. She also incurred $10,000 in expenses related to the sale. The buyer paid $80,000 cash and assumed Barbara's $20,000 mortgage on the property.

What is the amount of Barbara's gain, and where on Form 4797 will she report the sale?

 

(a) $10,000; Part I.

 (b) $10,000; Part II.

 (c) $20,000; Part II.

 (d) $20,000; Part III.

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