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$28,000 to Pat in 2008. The terms of the sale required Pat to pay
$14,000 cash, assume the $28,000 mortgage, and give Pedro eleven
notes for $6,000 each (plus interest at the federal rate). The first note
was payable two years from the date of sale, and each succeeding note
became due at two-year intervals. Pedro did NOT elect out of the
installment method for reporting the transaction. If Pat pays the 2011
note as promised, what is the recognized gain to Pedro in 2010
(exclusive of interest)?
25. (TCO 2) Both economic and social considerations can be used to
justify:
1. (TCO 3) Marge's auto, which is used for business purposes only, is
totally destroyed by a fire. The fair market value of the auto was
$8,000 at the time of the fire and the adjusted basis was $10,000.
Calculate the loss, and determine whether it is a deduction for or a
deduction from AGI.
2. (TCO 1) In 2010, David had the following transactions:
Salary
$75,000
Capital loss from a stock investment
($6,000)
Moving expense to change jobs
($12,500)
Received repayment of $9,000 loan he made to a friend in 2007 (also
interest of $900)
$9,900
Property taxes on personal residence
$1,500
Based on the information given above, determine David's AGI. Be
sure to show your work.
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ACCT 324 Midterm 3 NEW
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