Tim Sells Land to Brad for $90,000

question 72

Multiple Choice

Tim sells land to Brad for $90,000. Tim originally purchased the land for $50,000. Brad agrees to pay Tim six annual installments of $15,000 each. In year three, Brad makes his third installment of $15,000. How much taxable gain will Tim recognize in year three?

• A)$5,000
• B)$6,667
• C)$13,333
• D)$15,000
• E)All the taxable gain should be recognized in year one.

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Definitions:

Fight-or-Flight

A physiological response to perceived harmful events, attacks, or threats to survival, leading to a choice between confronting or fleeing.

Tend-and-Befriend

A behavioral response to stress involving seeking social affiliation and nurturing activities to manage stressful situations.

Exclusion

The act of denying someone access to a group, activity, or resource, often based on specific criteria.

Ultimatum Game

A game theory experiment where two players decide how to divide a sum of money, with the offer possibly being rejected by the receiver.