Steve drake sells a rental house on january 1, 2016, and receives $120,000 cash and a note for $45,000 at 10 percent interest. the purchaser also assumes the mortgage on the property of $35,000. steve

Steve drake sells a rental house on january 1, 2016, and receives $120,000 cash and a note for $45,000 at 10 percent interest. the purchaser also assumes the mortgage on the property of $35,000. steve's original cost for the house was $180,000 and accumulated depreciation was $30,000 on the date of sale. he collects only the $120,000 down payment in the year of sale.

a. if steve elects to recognize the total gain on the property in the year of sale, calculate the taxable gain. $ 35,000