What Form 4797 Transactions 2022-2023

Instructions and Help about What Form 4797 Transactions

Last question 14 what amount of gain should every report in the year of sale using the installment method all right Avery Corp sold a building for 600 grand aber received a down payment of 120 as well as annual principal payments of 120 for each of the subsequent four years they repurchase the building for five hundred and claim depreciation of eighty thousand dollars what amount of gain should every report in the year of sale using the installment method so we're looking at installment sales approach what we have to figure out is how much we're gonna get and how much our gain is so in looking at this here's what's going on we sold the building for 600 great 600 we received a down payment 120 mm-hmm as well as indepence 124 for years so 120 for four years is 480 480 plus 120 for eighty five eighty six hundred Avery purchased the building for five hundred and came depreciation of 80 so we purchased it for five hundred accumulated depreciation is 80 our Book value is 420 therefore we're gonna make 180 so 180 is gonna be the gain on the sale but normally you recognize that you're done but because we're gonna get the payments of 120 120 120 120 we just got 120 this year we're gonna get another for payment to 124 at 120 is 480 plus the 120 that's how we're getting the 600 so we're gonna get 120 this year how much of that is profit what do we do you take the gain over the sales price 600 that equals what about 6 times 3 is 8 percent therefore 30% of the 120 which is 36 is how much we should recognize that again is if you had to do...