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Suman, an individual, is prepared to begin downsizing his business, as such he sells a plot of land for $1,250,000 to a developer. The developer will begin to subdivide and sell the land, as such Suman is offered a 25% down payment with the remaining amount to be paid over five years bearing interest at 7%. Suman was told by a friend that he won't have to include his entire gain in his income in the year, and that there is something called the capital gains reserve? He is wondering how the gain will be included in his income if he doesn't have to include it all in one year. He paid $310,000 for the land in 1999. Required: Explain to Suman what the capital gains reserve is, and the purpose it serves. How much of the gain will Suman have to include in his income in the current year? Is there a form that must be filled? What will be the amount included in the next tax year? Your response should be in a memo format written directly to Suman. Permalink Reply - Childcare Expenses - DUE Sunday 13 June