Ken is considering two options for selling land for which he has an adjusted basis...
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Accounting
Ken is considering two options for selling land for which he has an adjusted basis of $100,000 and on which there is a mortgage of $80,000. Under the first option, Ken will sell the land for $225,000 with a stipulation in the sales contract that he liquidate the mortgage before the sale is complete. Under the second option, Ken will sell the land for $145,000, and the buyer will assume the mortgage.
Calculate Kens recognized gain under both options.
7.
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