John would like to know how the down payment and 1st installment for the sale of his business will be treated for tax purposes. The business was sold to a third party for $6,000,000 on April 1, 2019. The terms of the agreement are: 20% down payment, 10-year, 4.5% note that will start payment quarterly on May 1, 2019. The tax basis is $1,450,000. 1) Calculate the tax treatment realized on the down payment: Down Payment $0 Less: Return of Basis Realized & Recognized Long-Term Capital Gain $0 2) Calculate the tax treatment realized on the 1st installment payment (round to the nearest dollar): Installment Payment $0 Less: Interest Income Net Less: Return of Basis Realized & Recognized Long-Term Capital Gain $0 Without changing any calculations above, assume that there is building that John owns that the purchaser of the business does not want to buy that was originally purchased for $350,000 and that the land was allocated as $200,000 and the building as $150,000. If sold today, assume the accumulated depreciation is $83, 726 3) If the sales price of the building is $1,000,000, what is the Section 1250 gain and the Section 1231 gain that would be reported? Sales Proceeds $1,000,000 Less: Adjusted Basis Realized Gain $1,000,000 Section 1250 Gain Section 1231 Gain 4) What is the tax rate that the Section 1250 gain be reported at