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?
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?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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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