Question

In 2019, Beth sold equipment used in her business. Her basis in the property was $300,000 ($500,000 cost less $200,000 of depreciation). Beth sold the property for $400,000, with $100,000 due on the date of the sale and $300,000 (plus interest at the Federal rate) due in 2020. Beth's recognized gain from the installment sale in 2019 is:_______.

Answer 1

The question is probably missing options as given below:

In 2019, Beth sold equipment used in her business. Her basis in the property was $300,000 ($500,000 cost less $200,000 of depreciation). Beth sold the property for $400,000, with $100,000 due on the date of the sale and $300,000 (plus interest at the Federal rate) due in 2020. Beth's recognized gain from the installment sale in 2019 is:

A) $0.

B) $50,000.

C) $100,000.

D) $200,000.

E) None of the above.

Beth's recognized gain from the installment sale in 2019 is $100,000, as a result option C is correct.

Step-by-step explanation:

The gain on the sale remains the same whether or not total proceeds were received at the time of disposal or postponed.

The gain is: Sale proceeds-property basis(cost less depreciation)

=$400000-$300000

=$100,000 which gives C as the option to pick.