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Business, 02.04.2020 20:48 yakshp3702

In 2010, Aldo sold investment land with a $61,000 tax basis for $95,000. Payment consisted of $15,000 cash down and the purchaser’s note for $80,000. The note is being paid in 10 annual installments of $8,000, beginning in 2011.

a. Compute Aldo’s recognized gain under the installment sale method in 2010 and 2011.
b. In 2013, Aldo pledged the note as partial collateral for a $75,000 bank loan. The unpaid principal at date of pledge was $56,000. Determine the tax consequences of this pledge to Aldo.

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In 2010, Aldo sold investment land with a $61,000 tax basis for $95,000. Payment consisted of $15,00...
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