On Dec. 31, 2020, Mary sold a piece of investment land for $1M (basis = $100,000). Mary received $100,000 cash on Dec. 31, 2020 and a $900,000 note. The note calls for three annual installment payments of 300K beginning in 2021 and provides for annual interest payments (at market rate, beginning in 2021).

Mary will use the installment sale method to report her taxable gain. In 2021, Mary receives a $300,000 installment payment on the note plus $36,000 interest on the note. What amount of gross income will Mary report in 2021?

Answer rating: 100% (QA)

Since Mary opted ror the installment sale methool to veport ... View the full answer