This year,John purchased property from William by assuming an existing mortgage of $40,000 and agreed to pay an additional $60,000,plus interest,in the 3 years following the year of sale (i.e.$20,000 annual payments for three years,plus interest).William had an adjusted basis of $44,000 in the building.What are the sales price and the contract price in this transaction?

Question

Quizplus · Accepted Answer

C)The selling price is $40,000 mortgage assumed + $60,000 future annual payments = $100,000.The contract price is the $60,000 in future payments.

This Year,John Purchased Property from William by Assuming an Existing