Discussion Question $13-3($LO$.1)$

If a taxpayer sells property for cash, the amount realized consists of the net proceeds from the sale. For each of the following, indicate the effect on the amount realized if:

a$.$ The property is sold on credit.

The amount realized includes both the cash received at the time of sale and the cash to be received in the future $.$

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The amount realized from the sale or other disposition of property is a measure of the economic value received for property given up$.$

b$.$ A mortgage on the property is assumed by the buyer.

The assumption by the buyer of the seller's mortgage $$ the amount realized by $$ the seller $-$

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Correct

c$.$ A mortgage on the property is assumed by the seller.

The assumption by the seller of the buyer's mortgage $$ the amount realized by the seller

$$