Question

Simon sold investment property 2 years ago for $750. simon's basis in the property was $200. simon is receiving $150 per year from the buyer. simon reports this income on the installment method. if simon collects $150 in principal during the current year, how much gain should he report from the sale for the year

Answer 1

The gain that he should report from the sale for the year is $110.

Step-by-step explanation:

Simons investment on Property = $200

Simon sold the property = $750

Simons receiving per year $ 150

total period = 750/150

= 5 years.

Total gain = 750 – 200 = 550

current year gain = 550/5

= $110

Therefore, The gain that he should report from the sale for the year is $110.