Arnold gave land to his son, Bruce. Arnold's basis in the land was $100,000, and its fair market value at the date of the gift was $150,000. Bruce borrowed $130,000 from a bank that he used to improve the property. He sold the property to Della for $360,000. Della paid Bruce $90,000 in cash, assumed his $120,000 mortgage, and agreed to pay $150,000 in two years. Bruce's selling expenses were $10,000. Della is going to pay adequate interest.
Compute the following amounts:
a. Bruce's basis in the land at the time of the sale is $ ...
b. When computing his realized gain, what amount does Bruce use as the selling price and as the contract price?
Selling price: $ ...
Contract price: $ ...
c. Bruce's total realized gain on the sale is $ ..., but his recognized gain in the year of the sale is $ ...
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