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In year 1, Aldo sold ivnestment land with a $100,000 tax basis for $95,000. Payment...

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Accounting

In year 1, Aldo sold ivnestment land with a $100,000 tax basis for $95,000. Payment consisted of $15,000 cash down and the purchaser's note for $80,000. the not is being paid in 10 annual installments of $8,000 beginning in year 2. a) compute Aldo's recgnized gain under the installment sale method in years 1 and 2. b) in year 4, Aldo pledged te note as partial collateral for $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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