Adv tax accounting, please help

Sigchi4life
Category:
Accounting
Price: $15 USD

Question description

Lina, an attorney, sold an antique rug for $45,000 that had been in her

home. The rug cost Lina $12,000 several years ago. Lina collected $15,000 down and

received a one-year interest bearing note for the balance. She is unable to collect the bal-

ance, and after incurring court costs of $500, she repossesses the rug. The rug is damaged

when she recovers it and is now worth only $30,000.

a.How much gain must Lina report in the year of the sale?
b.How much gain, if any, must Lina report in the year she repossesses the rug?
c.What is the basis of the rug after the repossession?


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(Top Tutor) Daniel C.
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