Nick Sells Land with a $7,000 Adjusted Basis for $10,000

question 60

Essay

Nick sells land with a $7,000 adjusted basis for $10,000.Nick receives a $2,000 down payment with the balance of $8,000 due the following year.Nick is unable to collect the remaining $8,000 and,after incurring legal fees of $500,he repossesses the land when it has a fair market value of $9,000.
a.What is the amount of gain that Nick must report in the first year?
b.What is the amount of gain that Nick must report in the second year?
c.What is the basis in the repossessed stock?

Analyze the impact of activity level changes on budgeted and actual costs.

Determine the standard cost and price variances in budgeting.

Understand the relationship between output measures and cost formulation in budgeting.

Interpret the financial implications of deviations from budgeted plans.

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Definitions:

Clinical Decisions

The judgment and determinations made by healthcare professionals in the context of clinical care, based on a patient's health information and treatment options.

Critical Thinking

Active, purposeful, organized, cognitive process used to carefully examine one's thinking and the thinking of other individuals.

Intuition

Inner sensing that something is so.

Pharmacological

Pertaining to the science of drugs, including their composition, uses, and effects on the body.