This Year,John Purchased Property from William by Assuming an Existing

question 67

Multiple Choice

This year,John purchased property from William by assuming an existing mortgage of $40,000 and agreed to pay an additional $60,000,plus interest,in the 3 years following the year of sale (i.e.$20,000 annual payments for three years,plus interest) .William had an adjusted basis of $44,000 in the building.What are the sales price and the contract price in this transaction?

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Definitions:

Reconstruction

Reconstruction refers to the period following the Civil War (1865-1877) in which the United States attempted to redress the inequities of slavery and its political, social, and economic legacy and to solve the problems arising from the readmission to the Union of the 11 states that had seceded.

Republican Party

One of the two major political parties in the United States, historically associated with the abolition of slavery and civil rights, although its political stance has evolved over time.

U.S. Supreme Court

The highest court in the United States, serving as the final arbiter of legal disputes and constitutional matters.

Federal Government

The national government of a federal country, where powers are divided between the central authority and constituent political units (states or provinces).